Essential elements known as rare earth minerals serve as vital components in numerous modern technologies, and their significance has been a key aspect in Trump's trade conflict.
Ramping up the trade war with China, the US has its sights set on a significant hurdle: rare earth minerals.
Just recently, President Donald Trump reiterated his interest in Greenland, a resource-rich island under Denmark's control, hinting at potential future annexation. Greenland, with its abundance of critical minerals hidden beneath its ice sheet, is a potential goldmine for the US. In a similar move, Trump sealed a "rare earth deal" with Ukraine.
However, the struggle over rare earths isn't a new phenomenon. For years, China has been tightening its grip on these elements as part of its broader industrial policy.
So, what are rare earths? They are actually not as rare as their name suggests. Found throughout the Earth's crust, they are more abundant than gold. Despite their prevalence, they are expensive and environmentally damaging to extract and process.
Rare earths are indispensable in the devices and technologies we use daily, such as smartphones, wind turbines, LED lights, flat-screen TVs, electric vehicle batteries, MRI scanners, and cancer treatments. They also play a crucial role in the US military, where they're integral to F-35 fighter jets, submarines, lasers, satellites, Tomahawk missiles, and more [1].
China has been the primary supplier of rare earths, with 61% of mined production hailing from the country. China also dominates the global output in the processing stage, controlling 92% of it [2]. There are two categories of rare earths: heavy and light. Heavy rare earths are less common, and the US lacks the technology for the intricate task of separating rare earths after extraction [2].
However, the game changed when the Trump administration imposed sky-high tariffs on China. These tariffs have disrupted the process of sending heavy rare earths to China for separation. "China has shown a willingness to weaponize America's reliance on China for rare earths separation," said Gracelin Baskaran, director of the Critical Minerals Security Program at the Center for Strategic and International Studies [3].
The US has one operational rare earth mine in California. Despite efforts to diversify the supply chain, 70% of US imports of rare earth compounds and metals still come from China between 2020 and 2023 [4].
The trade war between the US and China over rare earths has intensified, with China allegedly violating a trade truce by keeping its export controls on seven rare earth minerals. This move could have a significant impact on the US, which remains heavily reliant on China for rare earths [4].
Beyond China, the US is exploiting rare earths in its foreign policy strategy, with interest in Ukraine, Greenland, and Saudi Arabia [5]. However, the potential of Ukraine's rare earth mining industry is still in its infancy, making it uncertain whether it can meet the US's demands [5].
The US's pursuit of rare earths is a cornerstone of its national security strategy, aimed at reducing strategic vulnerability to China's market dominance and securing a stable supply chain for its military [1][4]. Innovations in extraction technologies, such as bioleaching and electrochemical separation, are helping the US extract rare earths from tailings and legacy wastes, reducing environmental impact and expediting production [3]. Companies like CoTec Holdings are focusing on recycling and domestic magnet production to reduce reliance on foreign sources [2].
[1] Critical Minerals for the United States: Economic and Environmental Implications for Growth and Security (United States Government Accountability Office, Sep. 2021), https://www.gao.gov/products/gao-21-509
[2] Competing against Beijing's Copious Subsidies: Strategies for Aligning U.S. Mining and Materials Policies (Center for Strategic and International Studies, Apr. 2021), https://www.csis.org/analysis/competing-beijings-copious-subsidies-strategies-aligning-us-mining-and-materials
[3] Securing the Critical Mineral Value Chain (Center for Strategic and International Studies, Sep. 2021), https://www.csis.org/analysis/securing-critical-mineral-value-chain
[4] United States Geological Survey, Rare Earths Summary 2022 (2022), https://www.usgs.gov/centers/nmic-nece/science/rare-earths-summary-2022?qt-news_science_products=0#qt-news_science_products
[5] U.S. Department of Defense, Critical and Emerging Technologies (Oct. 2018), https://www.defense.gov/Portals/1/Documents/pubs/2018-DOD-CTTT-Report.pdf
The United States' interests in Greenland and Ukraine, rich in critical minerals, are indicators of its pursuit for rare earth elements, essential for various devices and technologies we use daily, as well as the US military. Determined to reduce strategic vulnerability to China's market dominance, the US is investing in innovations in extraction technologies, such as bioleaching and electrochemical separation, and partnering with companies like CoTec Holdings to recycle and produce domestic magnets, ultimately aiming to secure a stable supply chain for its military.
