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China’s Ruthless Grip on Rare Earths: A National Security Nightmare for America
Donald Trump confidently believed he would outsmart China in his so-called “trade war,” but in a shocking turn of events, Xi Jinping revealed the ace up his sleeve: rare earths. These 17 essential elements fuel the backbone of modern industries and technology, yet they remain entwined in the nefarious clutches of China. While not as scarce as once thought, their extraction and processing come with daunting challenges and sky-high costs.
Since the 1980s, China has maintained a stranglehold on global rare earth supplies. Not only does it dominate the richest deposits, but it also holds a **monopoly** over the technology required to extract and commercialize these precious resources. This is a critical concern as tensions rise between the United States and China over this vital sector.
“The rare earths have become a powerful bargaining chip in the escalating tensions between China and the US,”
The race for rare earth domination took a troubling turn after the Geneva Summit in mid-May, where both nations appeared to have reached a shaky truce amid a backdrop of rising tariffs—145% from the US and 125% from China. But this calm was nothing but a facade, as potential exchange agreements worth a staggering $650 billion hung by a thread.
In April, China imposed harsh restrictions on the export of seven crucial heavy and medium rare earths, sending international remittances plummeting by 74% year-on-year, with exports to the US collapsing by an astounding 93%. In retaliation, the US imposed its own export controls targeting Chinese industries, including critical aeronautical engines and semiconductor technologies.
China’s Threat to Global Stability
In a desperate move, both parties have confirmed a tentative agreement to revive trade in rare earths. According to an official statement from the Chinese Ministry of Commerce, “The Chinese part will approve export requests that meet the necessary requirements,” which undoubtedly puts America on high alert.
However, rare earths with military significance are still under tight restrictions. China has limited exports of crucial elements like samarium—vital for American defense technologies such as combat aircraft and missiles—while the US maintains its own bans on semiconductor exports for military applications. Treasury Secretary Scott Betting has made it clear that no concessions on artificial intelligence chip exports will be made in exchange for rare earth access.
The European Paradox: Caught in the Crossfire
China is not even shy about using its rare earth leverage against the European Union, complicating the geopolitical landscape. During the G7 summit, Ursula von der Leyen, President of the European Commission, issued a stern condemnation of China’s export control tactics, warning of a “new Chinese shock” on world markets.
Recent meetings between Chinese officials and EU representatives showcase a growing urgency. The EU ambassador to China, Jorge Toledo, has raised alarms about the rare earth issue, expressing hopes that China will resolve these tensions before the upcoming EU-China Summit. But will they budge?
China, sensing pressure like a cornered beast, has claimed it is “accelerating the review of export license requests” for these critical materials. But let’s not forget—China’s dominance in rare earth elements remains a ticking time bomb for global markets. While its market share has decreased from 90% to 60% over the last decade, the US and the EU are still years away from breaking free from this looming threat.
The stakes couldn’t be higher. The race for rare earths is not just about economics—it’s about national security and survival. It’s time for America to take a stand and reclaim its place in this critical industry before it’s too late.
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