China's New Rare Earth and Magnet Restrictions Threaten US Defense Supply Chains

https://www.csis.org/analysis/chinas-new-rare-earth-and-magnet-restrictions-threaten-us-defense-supply-chains

by stopbulying • 9 months ago

203 219 9 months ago

csis.org

Buttons8402• 9 months ago

If we're getting military supplies from a rival, isn't it already threatened?

johng• 9 months ago

Exactly. What a sad situation we find ourselves in.

GenerWork• 9 months ago

I'd say it's more of an incredibly large vulnerability, but in this case it may be the same thing.

No matter if it's called a threat or a vulnerability, hopefully this'll spur more action towards moving away from China for raw earths and magnets.

LPisGood• 9 months ago

I’ve never understood the attempt to draw a difference between threat and a vulnerability.

I’ve done offensive security work and worked on defensive security systems professionally. It seems to me like there’s a certain less technical side of computer security that cares a little too much about making definitions and checkboxes - when I get asked in an interview if I think threats or vulnerabilities are a bigger issue I know that job is not a good fit.

juusto• 9 months ago

Who isn't a "rival" for this administration?

lovich3• 9 months ago

No one. That is why they are trying to set up an autarky

ajross• 9 months ago

We all were screaming that Trump was going to start a trade war and how that was going to be bad for everyone. Even the most cynical of us didn't think he'd lose.

narrator• 9 months ago

Good thing we found out what our dependencies are on China were before we got in a shooting war with them.

seanmcdirmid4• 9 months ago

We knew about these dependencies since around 2014, definitely it was known during Trump 1, that America still hasn’t bothered getting its own rare earth refining up (the elements themselves aren’t that rare) is just bizarre, but private enterprise has continuously scoffed at doing it given the cheap prices the Chinese offered us.

defrost• 9 months ago

Even the most cynical of us didn't think he'd lose.

Perhaps a few within the US bubble thought that.

From the outside the asymmetry was pretty clear, the bulk of global manufacturing takes place within China, the bulk of mining and processing of technological vital inputs was under a Chinese umbrella, and the time to rebuild manufacturing and supply pipelines was on the order of a decade plus.

The US is a customer in a world full of customers and potential trade partners, China has found other customers, trade partners have been forced to develop trade outside of former US trade agreements.

It would have taken a long term careful plan to bring back manufacturing, trade dominance and critical supply chains to the US, doable but not exactly Trump's forte.

seanmcdirmid4• 9 months ago

America needed to innovate its way out of the problem, maybe also focused on creating supply chains and alliances that weren’t purely based on cheapest prices. But they never bothered, they still aren’t bothering. It’s like our leadership thinks the world will just give us free stuff because we are somehow exceptional.

sethammons• 9 months ago

Why do/did you think he wouldn't lose?

ggm• 9 months ago

Even the most cynical of us didn't think he'd lose.

Excuse me? As a sentence it's a fine sentence. It's not anchored in reality. Paul Krugman amongst others has been constantly reminding his subscriber list (448,000) that this is a trade war which only has losers. There is no factual basis to the assertion either only the most cynical of us, or didn't think.

remarkEon4• 9 months ago

There's almost half a million people who still listen to Paul Krugman?

TinkersW• 9 months ago

What? He is a moron, and is advised by morons, I mean we are talking about a person that started a trade war with Canada.

mensetmanusman2• 9 months ago

Define lose. China is in far more pain, and they are doing the world a favor in sending the signals on what needs to be done elsewhere to reduce the risk of over reliance on a mercantilist state.

seanmcdirmid4• 9 months ago

Uhm, a lot of us knew America didn’t have very good cards in this fight, definitely not the great cards Trump thought we had. It’s clear to me now that China will be the next world power now that Trump has disassembled the only real advantages we had (high tech innovator, attractor of world talent, world trust).

DougN72• 9 months ago

If Trump wasn’t such a bully and narcissist you’d have to believe he’s on the Chinese payroll to destroy America.

jwilber• 9 months ago

The reason people were screaming is because they expected America to lose. They were screaming about how stupid it is.

AngryData2• 9 months ago

30 years ago I might be surprised by us losing a trade war, I am not surprised whatsoever now. On paper the US still has high manufacturing production, but it is high production in a limited number of products and industries that

mensetmanusman2• 9 months ago

Humanities majors running America couldn’t grok the risk they were taking by incentivizing the outsourcing of these mining and refining processes.

This behavior to ban sales of materials needed for every advanced engine, actuator, sensor, etc. is why the Taiwan situation is fraught.

stevula• 9 months ago

Hey, leave us humanities majors out of it. Most of us have studied critical thinking skills and ethics, which could have easily been used to avoid the various geopolitical messes we’re in right now.

jfengel• 9 months ago

Sounds more like business majors. Who spend their spare time shoving humanities majors into lockers.

cosmicgadget4• 9 months ago

Lockers in college?

bigbadfeline2• 9 months ago

Humanities majors running America couldn’t grok the risk they were taking by incentivizing the outsourcing of these mining and refining processes.

Outsourcing of everything wasn't incentivized, it was forced on the US industry by Wall Street and their Republican friends. Around 2005-2006 there were 2 Congress bills about balancing the US current trade account, both were written and sponsored by Democrats but neither could get enough sponsors for a vote.

At that time, the GOP was full speed "outsource baby, outsource" and Wall Street analysts would bury any company refusing to follow the party line.

fzeroracer• 9 months ago

This hits the nail correctly. It's really funny to see people act like it was different heads running the economy back then, you've got the same big businesses and same big names now directly running the US government. The ones that outsourced everything and stripped away America's ability to be self-reliant are the same ones now stripping away America's ability to trade with even its closest allies.

People mistake their actions now as protectionism when it's about looting and pillaging what little is left so that they can keep their death grip on capital.

Telemakhos• 9 months ago

I wouldn't hasten to blame outsourcing on one political party or the other. Those of us old enough to remember Ross Perot and his "giant sucking sound" (his projection that free trade agreements under consideration in the early 1990s would lead to outsourcing and negative outcomes for the American economy) also remember that he was a third-party candidate. Both of the big parties and their candidates (Bush and Clinton back then) supported philosophies of trade that would (and in retrospect did) lead to outsourcing. Until Trump, neither party was willing to commit political capital towards questioning the free trade orthodoxy in any meaningful way, and it was free trade that lowered barriers to outsourcing.

braingravy• 9 months ago

What a hilarious world view that humanity majors are running the U.S.

The U.S. is ran by wealthy elites, who run the U.S. in such a way to make themselves more wealthy.

Of course they would outsource every job and business related resource mining operations if that meant more profit in the short term. It’s just good business!

KPGv25• 9 months ago

It seems to me the people running America are Trump (business), Bezos (engineering), Musk (Physics), Pichai (engineering), Zuckerberg (CS), Mike Johnson (business), John Thune (business), etc

but yeah the Vice President has a humanities degree

siliconc0w• 9 months ago

The reality is that it's probably good they're forcing our hand now rather than keep dumping and stringing us along.

echelon• 9 months ago

Same as what we've done to them with the GPU supply.

It's time for us to grow anti-fragility and independence. And we should expect China to do the same.

Sucks for US soybean farmers, but it would have undoubtedly happened in the future regardless.

We need to distribute critical manufacturing far and wide amongst our allies, and onshore some of the most important pieces. (Though I'm not sure the current admin considers our allies as friends, which is not a great idea during this great reshuffling.)

piskov• 9 months ago

It's time for us to grow anti-fragility and independence. And we should expect China to do the same.

Now imagine if people stopped strong-arming each other.

DougN72• 9 months ago

I’m not sure our “allies” consider us allies any more.

padjo5• 9 months ago

Who are the US’s allies these days? A bunch of petro state monarchies in the Middle East?

derriz• 9 months ago

In the last 9 months, we’ve seen the destruction of US international soft power on an unimaginable scale. It’s like watching a family fortune - built up over decades - go up in smoke in the hands of an irresponsible young heir.

It will be impossible or difficult for the US to “leverage” its traditional allies in the way it has in the past. NATO and trade were powerful tools to protect US interests but have been devalued considerably by what has happened this year.

Public sentiment towards the US in these countries is at unprecedented historic lows and given these allies were democracies, this means their political class cannot continue to support the US almost unconditionally like they have in the past. This destruction of goodwill will take a generation to repair.

ipnon• 9 months ago

This assumes we’re able to build a rare earth processing infrastructure in a reasonable timeframe, let’s say 10 years. I would not bet on it! America struggles to build anything quickly today except for software and capital.

andy_ppp2• 9 months ago

I dunno they built out fracking pretty quickly to become one of the worlds biggest oil producers, no reason why they couldn’t if willing to destroy the environment like China is.

testdelacc1• 9 months ago

That’s a pretty confident and sweeping statement.

How the I-95 Bridge Reopened Just 12 Days After Fiery Collapse (https://www.bloomberg.com/news/articles/2023-06-28/resurrect...)

lovich3• 9 months ago

This is not the first time they "forced our hand".

https://en.wikipedia.org/wiki/Rare_earths_trade_dispute

Either were not actually that bothered by the restriction and are using this to gin up conflict, or we've been this incompetent at responding to existential threats for over a decade and a half, including multiple presidents, both parties holding power, and this current admin's first term.

I am not really excited about either situation.

mattmaroon3• 9 months ago

It could be both.

jmyeet5• 9 months ago

I believe the tariff fiasco has crossed a line that marks the beginning of the end of American Empire and there's really no going back.

America is a one-party state. That party is neoliberalism. On economics and foreign policy there's almost no daylight between the major parties in the US and really foreign policy is economics. Imperialism is the highest form of capitalism.

Political discourse is dominated by culture war issues not economics. Race, gender, sexual oreintation, immigration status, etc are intentional distractions designed to divide the working class while the government steals from you to give it to the wealthy. As LBJ put it:

“If you can convince the lowest white man he's better than the best colored man, he won't notice you're picking his pocket. Hell, give him somebody to look down on, and he'll empty his pockets for you.”

Southern states were so deeply concerned that poor white people would unit with freed slaves they went out of their way to sow these kinds of racial divisions.

Why tariffs have crossed a line is because the Republicans seem to have forgotten that protecting the economic order is the point of culture war issues. You're not meant to actually start messing twith the economic order. Trade is so intertwined on the global stage that no country stands self-sufficient. China can wield an extremely large stick here. Rare earths are just the tip of the iceberg.

The US produces very little now and that's mostly weapons (and some commercial airplanes). You might say tech products but they're almost all produced in China. We have a dysfunctional economy that teeters on the brink of collapse where basics like food, water and shelter are getting out of reach for many people. Take out data centers being built and our economy is in decline and that's another theft from the public too as we're all paying for the electricity. Now that might be fine if those AI data centers actually produced something but... they don't.

The capitalist dream here seems to be to produce AI to displace workers but where does it end? Who buys your stuff if nobody has a job and those who do have no disposable income?

AI data centers, weapons and private equity firms. That's the modern US economy.

Compare that to China where the government is building infrastructure at an incredible rate and is investing in public services.

I feel like the epitaph for the United States of America will be something like "For a brief time we created a lot of shareholder value."

loandbehold• 9 months ago

The US is second by manufacturing output after China. It's just not true that "US produces very little".

cogman10• 9 months ago

It is true that the US manufacturing supply chain relies heavily on imports. It's also true that manufacturing works best when you've not caused every other nation to put blanket tariffs on your goods.

KPGv25• 9 months ago

On economics and foreign policy there's almost no daylight between the major parties in the US

This is, and the rudeness is warranted here, a breathtakingly stupid thing to claim. Are you just not looking at what the Republican party has become, or do you think the full-throated support of Trump's policies by the Republican party doesn't imply the Republican party's policies are Trump's policies?

The idea that the Democratic Party and Trump Party's economic and foreign policies have no daylight between them is laughable.

From the 100% tariffs, the plans to pave over Gaza and build hotels, slashing and burning social safety nets, threatening to annex Canada and Greenland, canceling chip fab plans in the US, the list goes on forever.

shigawire3• 9 months ago

To add, the idea that there tariffs in any way reflect neoliberal orthodoxy is bizarre as well. They are the antithesis for neoliberal free trade economics.

jmyeet5• 9 months ago

Explain to me how there's any substantive difference between either party on:

- Israel

- The rest of the Middle East

- Ukraine

- NATO

- China (tariffs notwithstanding)

- Russia

Even on something like immigration, the ICE Gestapo are only really an escalation of what both parties have been doing. Kamala's immigration plan in the last election cycle was esentially identical to Trump's 2020 platform. Obama was called, among other things, the deporter-in-chief (eg [1]). Biden blocked more asylum seekers under Title 42 than Trump did in his first term.

[1] https://ohss.dhs.gov/topics/immigration/yearbook/2019/table3...

YZF3• 9 months ago

"Rare earths are crucial for various defense technologies, including F-35 fighter jets, Virginia- and Columbia-class submarines, Tomahawk missiles, radar systems, Predator unmanned aerial vehicles, and the Joint Direct Attack Munition series of smart bombs. The United States is already struggling to keep pace in the production of these systems."

This feels like it can't be true. What % of "rare earths" are going into those military products? I mean those are super low volume manufacturing compared to EVs or anything consumer oriented. I'm sure there are strong magnets somewhere in a submarine but how many?

I thought "rare earths" were not rare at all. A lot of stuff is made in China because it's economical but can be made somewhere else for a bit more money. Do billion dollar fighter jets care if the magnet used in some electric motor costs $0.35 or $0.43 ?

Isn't the manufacturing issue in the US unrelated to any of this? Not enough factories, not enough skilled people, not having ramped up because munitions weren't needed?

grebc• 9 months ago

I think it’s a bit like TMSC and bringing back chip manufacturing. Sounds easy in theory till you go to do it.

My cursory understanding of why we don’t process this stuff anymore is environmental degradation more so than money.

Happy to ship the externalities elsewhere while it cheap and we’re on good/friendly terms.

usef-• 9 months ago

Yes, though money is still a big part of it. An Australian company (Lynas) developed the capability but was struggling to get investment largely because they couldn't produce them as cheaply as China's scale/subsidies/etc could.

When Japan was temporarily cut off from rare earths they became an investor (willing to pay more to reduce single-vendor risks), but apparently it was hard to get the US at the time to care enough. At least that's the story that was floating around.

graeme• 9 months ago

They're not rare but you have to process them and basically only China does. No clue as to the share of the equipment that is rare earths but if you need a component you need it. Doesn't matter if it's small or in theory cheap. If it's unavailable you don't have a substitute.

This has all been known for over a decade but no one invested in an alternate supply chain.

rzerowan2• 9 months ago

RE elemets mining/refining is ~80% China dominated, even US and other producers mined ores go to China for refinement.The concentrations are ridiculous for the process, think several tons to extract some kilos. Then theres the heavy RE and light , with some being produced as byproducts of other refinement/industrial processes where once again the top producer is China , who due to their scale have essentailly commoditized the production. Thats why magnets at cents instead of several dollars or tens of dollars.

As for all those EV/consumer and Mil products its not raw RE being utilised but speciality alloys that are worked to produce whatever the material science requires , where once again there one industrial producer.

Thats what the whole chain part of supply chain comes in , similar to why its easier and cheaper to manufacture iphones in Schenzen; all the refining/alloys/smelting is in one location with the skilled workforce and advanced methods that have been iterated over the last 30 years.

As to what % go into mil products, several kilos of this several of that forged into speciality alloys at commodity prices vs doing it at artisinal mining prices and those billion dollar weapon systems become tens or hundred billion dollar systems.

keepamovin• 9 months ago

Yes, the mines are not in China, but the refining is. Is it impossible to onshore refining for supply security?

YZF3• 9 months ago

As to what % go into mil products, several kilos of this several of that forged into speciality alloys at commodity prices vs doing it at artisinal mining prices and those billion dollar weapon systems become tens or hundred billion dollar systems.

I am very skeptical. The cost of buying from non-chinese sources is not going to be billions of dollars for some kilos of magnets. There are other options e.g. https://mpmaterials.com/ or https://www.neomaterials.com/ .

Sure. There's magnets everywhere. In speakers, in EVs (motors, actuators), pumps, wind turbines whatnot. Military use has to be a tiny tiny fraction. Like less than 1% or even less than 0.1%. These are not expensive bits- it's just China makes them cheaper.

China seems to own about 90% of the market. So for sure we're not going to be able to replace 90% of the market in a blink. But that 90% isn't going away, China is still selling EVs and other products. The 10% is plenty for military use, even if the prices go up a lot (military bits are usually mil-spec and expensive anyways). There's definitely economic leverage there but I call bs on the military angle.

hilbert428• 9 months ago

"RE elemets mining/refining is ~80% China dominated, even US and other producers mined ores go to China for refinement."

If this is a problem now then tough. Decades ago this would have been seen as a major strategic/security issue.

One can have little sympathy when security is deliberately traded away for a few dollars extra profit.

BTW, rare earths aren't exactly rare and the US has enough chemical knowhow how to refine them. Sorry, any shortage is of the US's own making.

pottertheotter• 9 months ago

As you said, rare earth elements aren't really rare--they are very abundant. But they are mixed in with themselves (there's 17 of them) and lots of other elements. Think of it like if you had 50 different colored sands and had huge amounts of all of them, then mixed them all up. The rarity is that you're not going to go through that sand and find a big patch of blue sand.

There's plenty of them, and all over the world. It's also important to separate the mining of rare earths from the processing/refining. 60% of REEs come from mines in China. But 90% of the processing is done in China (for some of them, heavy REEs, 100% of it is done there).

It wasn't always this way, but started to change in the 80s and 90s as Chinese firms were able to process rare earths at much lower costs. It was a mix of things--labor rates, lax standards, as well as state subsidies (the latter shouldn't be overlooked).

It's difficult to reopen processors, and starting up new ones requires a lot of time and money. We can do it, we just can't flip a switch and start it up. Also, China has developed a lot of new technology to do it and have export controls on the tech. Also, we have much more severe environmental standards these days that would make it even more difficult to get going.

hooch• 9 months ago

From a companion article: "For instance, an F-35 contains more than 900 pounds of REEs, an Arleigh Burke–class DDG-51 destroyer requires approximately 5,200 pounds, and a Virginia-class submarine uses about 9,200 pounds."

refurb4• 9 months ago

That’s just a reporter who hasn’t done their research.

Rare earth are used as additives to things like iron and other metals.

I’ll bet the reporter saw “9,200 pounds of rare earth alloys” and decided “alloys” is too confusing and dropped it.

kyawzazaw• 9 months ago

it's rare compared to other stuff. plus you have the issue of refinement.

rapjr9• 9 months ago

Rare earths are not rare on Earth, but production of rare earth metals is rare and difficult and almost exclusively done by China. There are two other factors that make this announcement important though. One is the use of the foreign direct product rule, which means China is requiring all use of rare earths produced by China to be tracked and require approval, and all military applications are not going to be approved (why would China arm it's competitors?) The other factor is that while things like F-35's may only use a few hundred pounds of rare earths each and there are not many of them, things like smart bombs and semiconductors need rare earths and there are a LOT of those. If China can truly cut the US from China's production, it's likely going to greatly reduce the US's current attempts to scale up both weapons production and the more advanced semiconductors (like GPU's for AI) until the US can get alternate sources. It will take 5-10 years to build alternate sources (some small pilot projects are near completion, but scaling up will take a while), so during that time the US could be short on weapons and compute power. The US military has done some stock piling of rare earths, but it's a fairly small stockpile. So worst case is no weapons or AI for the US for some time.

There will also be consumer effects. EV's, drones, phones, TV's, RC cars, and more all use rare earths or rare earth magnets. Because rare earths were cheap before, most quality electric motors now use them. China can now cut off those uses also if they want to.

How effectively China can halt sales to the US is debatable. The CIA could start a toy manufacturer front company and buy rare earth magnets for example. China may eventually find out and cut them off, but then the CIA can just start a new front company. Buying from European or Asian companies as intermediaries may be difficult to enforce. If a war started over Taiwan, China could just cut off all shipments to the world. So there is perhaps a five year window here where China can exercise power via rare earths. Beyond that alternate sources will likely be in place.

So one thing China is "saying" here is that if the US is going to cut China off from advanced computer chips, China is going to make it impossible to make those chips so the US won't have them either. This could be enough to bring a sudden halt to US AI investment. It would definitely introduce a big new uncertainty.

LexiMax2• 9 months ago

How effectively China can halt sales to the US is debatable.

Every intermediary or degree of separation introduced raises the price as each link in the chain demands their slice of the action. They might not be able to stop sales, but I imagine they might make it quite expensive.

hilbert428• 9 months ago

"It will take 5-10 years to build alternate sources (some small pilot projects are near completion, but scaling up will take a while), so during that time the US could be short on weapons"

As I said elsewhere, if the US really wanted to it could solve the shortage in only months. I refer you to the phenomenal retooling exercise and enormous production growth in WWII. I suggest you read those stats.

It's just a matter of will.

jandrewrogers5• 9 months ago

The US has an abundance of rare earth and many other metals, substantially more than all but a few other countries. Aggressive and cynical environmental activism that buries mine development in decades of lawsuits has made it financially infeasible to develop domestic resources to the point where even mineral exploration is rarely done in the US anymore. No point in exploring for minerals if you won’t be allowed to mine them.

In principle, metal refineries are not that difficult to build and operate. It isn’t rocket science and could be done relatively quickly if the US really wanted to. In practice, any attempt at doing so will be buried in decades of cynical blocking actions by political activists. It wouldn’t be surprising to find out the parties blocking this are substantially albeit indirectly supported by adversarial countries.

It is no different than why we can’t build housing. Unless the US adopts an attitude of telling the haters to go pound sand because building things is important to the furtherance of civilization, nothing will happen.

We as a culture and society give veto power over damn near everything to far too many people that couldn’t be trusted with authority over a lemonade stand.

KPGv25• 9 months ago

Aggressive and cynical environmental activism

How is environmental activism cynical? My understanding is that RE mining is terrible for the environment. If I must cause some level of pollution, I don't think it's cynical to want it to happen far from where I am.

shigawire3• 9 months ago

Build the refiners next to your house then.

There's a happy medium where we scaled back regulations to allow enough production, but don't pretend there won't be losers from that.

14• 9 months ago

If supply was cut off and critical defense tech was at risk of being crippled I am certain it would be deemed a matter of nation security and things would move very quickly.

throwaway4224322• 9 months ago

The know-how has been lost so those currently looking to build plants have to relearn the processes. At the same time they need to examine new methods using different chemicals depending on the material they are extracting from and the particular impurities that need to be removed.

Ball park for a processing plant is 1.5b and 2-3 years from digging foundations to operations if the funds are there and it's fully approved. A lot of the metallurgical testing can be done in parallel with the build, but getting off-take partners requires being able to prove you can supply, and the off-take partners usually supply a lot of the funding.

Case in point, Lynas' Seadrift project in Texas is stalled and may not proceed due to an waste-water permitting issue and the USG not wanting to provide the additional funding required, or fully commit and guarantee off-take.

maxglute5• 9 months ago

I thought "rare earths" were not rare at all

Propaganda. Some strategic rare earth is indeed rare.

As in economically extractable stuff are geologically rare.

The strategic heavy stuff (dysprosium, terbium, yttrium) for high performing magnets are ECONOMICALLY extracted from ionic clay deposits mostly in PRC, myanmar (controlled by PRC), and small pockets else where (Lynas Australia+Malaysia) which is <10% i.e. not enough for world demand but process still depends on PRC tech.

Rare earth is not rare for these HeavyREE in the sense that fresh water is not rare for a desert nation next to the ocean, you just have to spend $$$ desalinate. Except this is 2000s, and the technology to do so at scale doesn't exist. US+co would have to plow through order magnitude more rocks to get the small % of HREE, i.e it's much more energy intensive and polluting to the point where it might not even be strategically viable. See how PRC has MORE shale deposits than US on paper but they still have to import fossil because the shale is technically hard to access.

TLDR is PRC controls like ~90% of supply and ~100% of process for some strategic HREEs, i.e. more than US EUV tier control. The only saving grace is HREE doesn't depreciate like semiconductors so if it can be smuggled (like US did with Ti from USSR during coldwar) it would be golden, but you also can't rent HREE from the cloud. So it depends on how strong PRC enforces controls. The other reminder is there is host of other elements that are also strategic (Ga/Ge for radars etc), which PRC also functionally has 100% control over due to having ability to process to sigmas of purity, i.e. imagine if everyone has oil but only one country has refinery technology.

tonyhart72• 9 months ago

if you cant stop north korea or russia buying things from blackmarket, the no one can stop the US from buying such things

US has more resources and allies that can be used as a supplier, its just making things more expensive

silexia• 9 months ago

China uses slave labor and extremely toxic environmental damage to build this stuff. Western countries banned that sort of thing. We have to relax our laws or increase tariffs to have a domestic industry.

tooltalk• 9 months ago

What % of "rare earths" are going into those military products?

This is somewhat dated (2012), but I suspect that it hasn't changed much: <5%[1].

1. Rare Earths Shortage Would Spur Pentagon to Action, Gopal Ratnam, Bloomberg April 9, 2012 https://archive.ph/1aEF8

roenxi3• 9 months ago

Just to ask the obvious question - if China has the ability to threaten the US War [0] supply chain, would it make sense for the US to adopt a more peaceful strategy? The Chinese seem to be slowly building up a dominant position without their army really leaving the Chinese borders. And their trade policy seems to mostly leverage producing high quality goods cheaply. Maybe the US could emulate that.

[0] That rename was the best gift Trump has given the international community so far.

CyanLite22• 9 months ago

Without US military intervention and support, Taiwan and Ukraine would fall. Then dozens of other islands in the Pacific as well as Eastern Europe. The U.S. economy and technological growth would be devastated if Taiwan (and TSMC) falls to the Chinese. This is a WW3 scenario.

roenxi3• 9 months ago

My understanding based on the reports out of the military-industrial complex is that the decision over whether Taiwan falls sits pretty much entirely with the decision makers in Beijing. There isn't much the US can do about it. If they can't coerce Russia in Ukraine then they definitely can't coerce Chinese decision making about the security situation off the coast of China.

It is a bit late to use Taiwan and Ukraine as justifications for the US using a military solution. It isn't winning these fights.

tokioyoyo• 9 months ago

China wants Taiwan. Ideally not through bloodshed, but economically and strategically force them to reunite. Given the amount of trade and relationship between PRC and Taiwan, I would write off that possibility in the future.

derelicta7• 9 months ago

You say that as if it were a bad thing lol.

Also regarding Taiwan, the situation is actually very simple. Imagine one(or many) US State becoming independent just to keep relying on slavery to prop up its economy. Don't you think the rest of the US shouldn't have to step up and put an end to this depravity? Now, if you agree with me, then you should also agree with me on Taiwan. Taiwan is a backward capitalist dictatorship. Why shouldn't the rest of the democratic Chinese homeland take over this island to install a legitimate socialist democracy?

lenkite• 9 months ago

If China decides to annex Taiwan tomorrow, there is little the US can do about it without starting a nuclear war.

It would be the same as another power attempting to liberate Cuba from US punishment.

bouncycastle• 9 months ago

The US is not defending Taiwan for the sake of "supporting its people" it or because of TSMC. It's actually because Taiwan is part of the "First island chain", and it's crucial in keeping China away from taking the Pacific Ocean and threatening the US west coast. The US will throw everything it has to defend it. It is absolutely vital to US territorial security. See https://en.wikipedia.org/wiki/First_island_chain

matthewdgreen• 9 months ago

My assumption is that the military supply chain in any country is a tiny percentage of rare earth supply, compared to the huge fraction that’s used in commercial applications. And since the military is prioritized and a perfect embargo doesn’t exist, “choking off the supply to crush the military” is almost impossible.

remarkEon4• 9 months ago

would it make sense for the US to adopt a more peaceful strategy?

"Just be nicer when someone threatens to punch you in the mouth"

The structure of the Chinese economy is very different from ours. It's not that their trade policy "leverages producing high quality goods cheaply", as if there's something magic about the dirt in Shenzhen. More that they were able to play a very long game, and take advantage of continual missteps in industrial policy that started somewhere back in the 1990s. They have not won this game yet.

padjo5• 9 months ago

Who is threatening to punch who in the mouth?

brazukadev3• 9 months ago

"Just be nicer when someone threatens to punch you in the mouth"

You forgot to mention that you punched this still in the month 5 times already, albeit quite the weak sucker punches

tehjoker3• 9 months ago

Good, if the US is weak enough maybe we wont try to start a war

cosmicgadget4• 9 months ago

A strong US keeps China out of Taiwan and Russia out of Europe, so at least there's that.

conorcleary• 9 months ago

A weak one invites them.

tehjoker3• 9 months ago

Neither of these are problems that concern us, and to a great extent are manufactured by us.

rchaud3• 9 months ago

If the Taliban were too much for the US to handle, I don't see how a direct confrontation with a nuclear power is on the table.

cjbgkagh2• 9 months ago

The problem is if the US thinks they’ll be weaker in the future then it would be in their interest start the war sooner instead of waiting. I think it’s China who is taking the long term approach.

tehjoker3• 9 months ago

My understanding is the pentagon was planning for 2025 and it slipped to 2026 a few years ago.

chii4• 9 months ago

the US being weak is why new wars start. Like it or hate it, the reason there was many decades of (relative) peace after the fall of the USSR is due to the US being the only superpower. Obviously, china doesnt like that.

rchaud3• 9 months ago

Decades of peace? The US were bystanders in the wars in Rwanda, Bosnia and East Timor in the 90s, and invaded Iraq and Afghanistan within 12 years of the fall of the USSR.

nine_zeros• 9 months ago

Isn't it widely accepted that every country is playing the art of the deal with America after having been bullied by this administration so much? I wouldn't be surprised if China ekes out a better negotiation than EU or other countries because of this play - because this is the only language this administration understands.

Paradigma11• 9 months ago

On a related note, I am not sure the 20% EU deal is that bad for the EU. Any practical ramifications are a few years in the future (building local production) and whenever Trump threatens to rise tariffs by n% because of x they can always counter with n+20% and erase the board.

chillycharlie• 9 months ago

Hopefully this motivates alternatives to rare earths, China dominates because they can get away with polluting huge areas. For 1 kg of rare earth, you get roughly 200–300 kg of rock tailings, 2–3 kg of chemical/toxic waste.

cdmckay• 9 months ago

Any sources on this?

From everything I’ve read this is not the case and they instead made it a national priority to have a secure supply.

ksec• 9 months ago

Wondering if anyone with knowledge can explain a little more.

We know Rare Earth are not rare. But do high concentration of Rare Earth exist? i.e larger total number of Kg per tonne extracted. Or is the number so small it is negligible? How big of a site would be needed if US were to be self sufficient? What is the highest cost of extraction? Electricity? Are extraction automated? Could it be automated? They say environmental issues, what exactly are those issues? Metallic or chemical contamination? How much more expensive would it be in the US if the initial Capex were not needed for ROI?

I mean I could ask those questions for every other industry that has China as supply Chain chock point but most post or articles seems to ignore it.

aeternum• 9 months ago

A better name might be trace metals. They're not actually rare just extremely dilute so you need to create huge chemical leaching ponds (sulfuric or hydrochloric acid) either above or below ground to sufficiently concentrate and collect them.

Of course the ponds create lots of waste gas and water, including radioactive elements and metals since you end up dissolving and concentrating those also. (So both metallic and chemical contamination) The ratio is something like 1 ton of rare earths = 2000 tons of toxic waste.

Seems to me like the issue is not so much the capex cost, but the regulatory and environmental cost. Doing it at scale in a way that doesn't harm the environment (and proving that) is likely prohibitably expensive in the US.

jandrewrogers5• 9 months ago

An issue that might not be obvious is that most of the metals in question are mined exclusively as secondary and tertiary ores. It is rarely profitable to mine them as primary ores and in some cases, like gallium, they don’t exist as primary ores. Consequently, there is a long list of metals that are mined almost entirely from the waste streams of primary metal ores with chemical processes that coincidentally have these other metals or which coincidentally partially refine other metals in the waste stream. This allows you to get a lot of work for free as a side-effect of processing the primary ore.

A canonical example of this is gallium, which famously doesn’t concentrate or form ores. However, the process of refining aluminum coincidentally partially refines gallium as a byproduct. So almost all gallium is produced by continued processing of the aluminum refinery waste stream even though aluminum ore contains no more gallium than a random rock.

China produces almost all of their REE from secondary and tertiary ores. The prerequisite to having these secondary and tertiary ore process is having a primary ore. If you are not processing primary ores, none of the secondary and tertiary ores will be available to you as an option. If you want to have a supply chain for diverse metals, you need to be processing diverse primary ores with an eye toward reprocessing the waste stream when it is chemically efficient.

The US has outsourced much of the primary ore processing that can produce a lot of metals that can only be economically produced as secondary ore products.

crvdgc• 9 months ago

Some Chinese language source claims that it's a reaction to the Pakistan-US rare earth deal.

My pet theory is that this is intended as an attack to the concept of long-arm jurisdiction itself, due to

1. This is the first ever long-arm jurisdiction policy from China.

2. Diplomatically, China usually advocates for the total sovereignty of each country within its border.

3. The recent chip entity list has been a huge headache.

4. Notice how the language mirrors the US justification for the chip restriction: dual use, national security.

noisy_boy• 9 months ago

Some Chinese language source claims that it's a reaction to the Pakistan-US rare earth deal.

Maybe they approached India for a deal that was too lopsided in favour of US for the former to accept so US did the show-and-tell cozying up to Pakistan to get a better while publicly shitting on India? Just follow the money?

burnt-resistor• 9 months ago

Xi is getting China ready to attack Taiwan in 2026 or 2027, and the now mutual unwinding of economic relations between the US and China is underway. Still frenemies at this point, but Trump is aiming for more enemy status sooner because it causes media drama and draws attention to him. The US will be screwed because domestic production takes years to happen and it has lost most of its machine tool suppliers, knowledge, and workers. Manufacturing productivity is essential for any sort of war, as evidenced by the history of the American Civil War and WW II.

If the US doesn't impeach and remove Trump and Vance, and get a real, war-time leader who isn't a celebrity reality star ASAP, it will be doomed as China will rapidly seize Taiwan, disrupt Western chip production and plunge the West into an economic armageddon, and likely widen to a war with Japan who would definitely intervene militarily to defend economic technological resources in Taiwan. No more incompetent, self-destructive, corrupt, ideologue chaos can be tolerated.

Khaine• 9 months ago

China has also suspended purchasing of BHP iron ore as a negotiating tactic to lower prices. They banned Australian barley, wine and coal when the previous government upset them.

Honestly, everyone should put tarrifs on china. Bringing them into the WTO was the biggest mistake made. People thought it would drive them to democracy. Instead the opposite has happened. The sooner, Chinese companies are forced to compete fairly the better. When western countries can sell cars in China as easy as BYD can ship shit boxes to the west, the better. Until then, fuck them.

Raise tariffs, restrict trade, disincentivise investment in China. Build out manufacturing capabilities in western countries

someNameIG• 9 months ago

One of the speculations I've seen going around about the iron ore thing is that China wants to buy it off us (Australia) in RMB, not USD.

rchaud3• 9 months ago

People thought it would drive them to democracy

That's the White House's cover story, not the actual reason. China is in the WTO because the Fortune 500 needed a stable tariff regime to streamline production offshoring to a country with weak labor and environmental protections, but without the political instability of actual democracies.

jambutters• 9 months ago

Not unique to China. Japan also withheld critical semiconductor materials from Korea due to Korea not backing down on historical disputes in 2019 https://www.cnbc.com/2019/07/23/japan-south-korea-dispute-im...

tock• 9 months ago

This is bad. This whole debacle has only proven two things: you can't trust China. And you can't trust the USA. Globalisation is slowly going to reverse :(

blackoil• 9 months ago

More like monopolies are bad, be at company, country or currency level.

AngryData2• 9 months ago

I mean you should definitely be careful with China, but I don't see how this example is evidence that we shouldn't trust China as it is mainly a response to heavy US tariffs and pulling back from established trade deals. The US seems like the far better "You can't trust them" candidate in this situation.

snorbleck• 9 months ago

maybe we just need a big rock half the size of Earth made entirely of rare earths from the cosmos to strike the planet. this would solve all of our rare earths problems. we would never need rare earths again.

buyucu• 9 months ago

Play stupid games, win stupid prizes. Honestly, what did the Americans expect?

notorandit• 9 months ago

Is it time for carbon-based technologies to be made available?

tsoukase• 9 months ago

The vague, general and ill specified argument of "national security" can mean anything, from "we are totally screwed" up to "our fighter's LCD screen has 10% less contrast than it should". Only an insider can provide some context in what RE means currently.

maxglute5• 9 months ago

High temperature magnets for motors (controlling flight surfaces), radar, sonar, lasers. TLDR miniturization, increase power draw. Might have to reduce range due to heaver components, or keep range by deliver smaller payloads, all while sensing less because you can't power emitters as hard, i.e. now you're using more ordnance to attack/defend. But main issue is if you can't smuggle, designing around is expensive / long process and all of a sudden your inventory has 2 supply chains for new / legacy fleet.

cholantesh• 9 months ago

This is the intent of every last CSIS publication: to promote the expansion of the military industrial complex with pearl-clutching language.

mikewarot• 9 months ago

I remember talking with someone well over a decade ago who predicted this over Thanksgiving Dinner. The politicians decided to let Magnequench, an Indiana company that made the small, very high torque rare-earth magnet servomotors you need if you want to steer missile fins, etc. get sold to China.

He used to work incorporating those motors into other gear, and predicted this would come back to bite us.

My understanding is the main thing keeping us from ramping up the US domestic rare earth supply chain is the cost of environmental compliance. A long term thinking DOD would have kept this in mind for National Security reasons, and funded things just to keep our supplies viable. As it is, we have vast national security stockpiles of various raw materials, but you know how well central planning worked out for the Soviets.

_DeadFred_2• 9 months ago

Our government really fought a trade war with China (the last mini trade war were Trump got concessions) and then started another trade war expecting to fight the exact same war again and not evolving/preparing knowing you can never fight the same war twice? We have the worst political class ever.

China's New Rare Earth and Magnet Restrictions Threaten US Defense Supply Chains

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