Jumel Gabilan Estrañero
Barely three months before the 2025 ends, United States finds itself structurally vulnerable in the supply chain for critical rare-earth elements (REEs), while China holds disproportionately strong leverage. China commands around 85% of processing and more than 90% of magnet production.
Moreover, the U.S. (under the Donald Trump administration) is ramping up its efforts to build a domestic supply chain for rare earths—including via legislation such as the Rare Earth Magnet Security Act and the Critical Minerals Security Act. In fact, a key U.S. deal: the MP Materials mine (in the U.S.) is backed by the U.S. Department of Defense, which will become the largest shareholder and commit to off-take plus price-floor mechanisms. But despite this push, the U.S. still lacks commercial-scale capability in heavy rare-earth separation, magnet manufacturing know-how, and has an “expertise gap.”
Meanwhile, we can observe that China is not passive. It is reportedly cataloguing rare-earth experts, monitoring travel, tightening controls. The up-shot is that China retains a “powerful hand” in any near-term U.S.–China trade fight because of its dominant position. In other words, the rare-earth supply chain as a strategic vulnerability for the U.S. and a tool of leverage for China.
Geopolitical Vulnerabilities and Strategic Stakes
Prior to this October development, only last month, a deal has been reached between the Trump administration and China to keep TikTok operational in the United States. That an emerging TikTok deal with China will ensure that U.S. companies control the algorithm[2] that powers the app’s video feed. On the technicality and legal terms of the deal, the app will be spun off into a new U.S. joint venture owned by a consortium of American investors — including tech giant Oracle and investment firm Silver Lake Partners.
On the other hand, the recent move by China relative to the rare earth minerals is not just a trade-issue; it is a strategic one. Several interlocking dimensions emerge:
a) Strategic materials as geopolitical leverage
China’s dominance in REE processing and magnets gives it the potential to exert coercive leverage. China being able to “switch on the tap whenever they want and switch it off whenever they want and control the market.” In a geopolitical standoff, controlling inputs to military systems (fighter jets, submarines, missiles)is a source of power. For example, many U.S. defense platforms rely on foreign REEs. Meanwhile TikTok, by contrast, is a maturing consumer app with diminishing strategic weight as pointed out by Dimitar Gueorguiev, Syracuse University associate professor of Political Science.
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