America Relies on Chinese Minerals, and Beijing Wants to Keep it That Way

Farrell Gregory

Source Link

Minerals are the newest front in US-China economic warfare. In recent months, the People’s Republic of China has accelerated its usage of mineral export controls to choke American access to critical minerals, prompting many policymakers to fear a complete Chinese embargo. But that’s a misunderstanding of Beijing’s goals. Instead, it’s become clear that Chinese policymakers are balancing strategic disruption with the desire to keep America dependent on Chinese markets.

If China were to entirely shut off exports to America, the US economy would lose the ability to manufacture essential military and commercial goods. But an embargo like this would also accelerate US efforts to find alternative sources of key inputs, reducing US demand for Chinese goods. That’s the last thing China wants.

China doesn’t want to crash our economy; it wants to keep us hooked in order to shape our policy. The selective usage of export controls keeps us reliant while demonstrating their leverage. And as long as Chinese imports are cheap and available, and America fails to develop domestic sources, their dominance will continue.

China’s recent restrictions on rare earth elements (REEs) are a perfect example. In April, China shut off rare earth element shipments and introduced a licensing regime to curtail largely heavy REE exports. PRC officials are pressuring companies in other countries, such as South Korea, not to export products that use restricted REEs.

That’s a problem for the United States. REEs are used in specialized magnets, cars, sensors, aircraft, and other advanced commercial technologies. They’re also vital for major weapon platforms such as Tomahawk missiles, Predator drones, and F-35 aircraft. For such critical hardware, we never should have become so reliant on China.

But geological reality will complicate the path to American REE production. Compared to light REEs, heavy REEs are less commonly found and less densely concentrated. Condensed heavy rare earth sources are most frequently contained within ionic clay deposits, which can be about forty times more bountiful than major REE sites.