Trump Executive Order Seeks To Combat China’s Rare-Earth Minerals Dominance

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Trump Executive Order Seeks To Combat China’s Rare-Earth Minerals Dominance

Tyler Durden

Thu, 10/01/2020 – 21:40

On Wednesday President Trump signed an executive order which declared a “national emergency” in the US mining industry, highlighting America’s dangerous overdependence on China for what’s known as rare-earth minerals.

China has been widely acknowledged as dominant in the rare-earth minerals market for decades, which includes a group of obscure minerals (typically 17 identified as such) often used in manufacturing anything from advanced electronics like flat screens to even weapons. For example, one of the most sought after – samarium cobalt – is used in precision guided missiles and fighter jets, and advanced communications systems.

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Via Shutterstock

The order says that  “our Nation’s undue reliance on critical minerals, in processed or unprocessed form, from foreign adversaries constitutes an unusual and extraordinary threat, which has its source in substantial part outside the United States, to the national security, foreign policy, and economy of the United States. I hereby declare a national emergency to deal with that threat.”

China began cementing its global dominance in the 1980s after the Nuclear Regulatory Commission and the International Atomic Energy Agency moved to severely restrict rare-earth mineral mining related to environmental concerns.

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They are deemed “rare” precisely because there are no known alternatives to them, and given they’ve been key in developing specific technologies preponderant among industrialized populations.

The order’s text specifically charges that Beijing has intentionally exploited its position in the market, especially regarding 35 minerals that are “essential to the economic and national security of the United States”:

Our dependence on one country, the People’s Republic of China (China), for multiple critical minerals is particularly concerning. The United States now imports 80 percent of its rare earth elements directly from China, with portions of the remainder indirectly sourced from China through other countries. In the 1980s, the United States produced more of these elements than any other country in the world, but China used aggressive economic practices to strategically flood the global market for rare earth elements and displace its competitors

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Rare-earth minerals file image

As Reuters underscores, “While the United States used to be the leading producer of the minerals, China has used its heft in the industry to its advantage in the trade dispute between the two world leaders.”

No doubt this remains a crucial US vulnerability weakening Washington leverage amid Trump’s ongoing trade dispute, as well as select sanctions on the mainland related to the Hong Kong issue and other geopolitical pressure spots.

Just after Trump’s signing the order, Ellen Lord, the top acquisition official at the Pentagon, told a Senate hearing “We are on a trajectory to increase our national defense stockpile relative to rare earth minerals. The silver lining of COVID has been that I think most Americans now understand the importance of having domestic supplies.” 

“We could certainly, especially under the auspices of the [executive order] that just came out yesterday, work with the interagency, because there is already a lot of work going on to look at expanding the national defense stockpile to include more rare earths,” she said in her Thursday remarks.

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