Why China’s Rare Earth Minerals Matter——— And It Matters!
By James Hall, co-author of the popular Audible book, "The Sword of Damocles, Our Nuclear Age."
The fact is China controls about 70 percent of global rare earth mining capacity and more than 87 percent of refining capacity. This gives it near‑monopoly power over elements essential to modern technology and defense industries (USGS 2025).
Rare earth elements possess unique magnetic, luminescent, and conductive properties that underpin:
Magnets in electric‑vehicle motors and wind turbines
Phosphors for flat‑panel displays and LED lighting
Catalysts in clean‑energy systems such as fuel cells
Components in computer chips, smartphones, and advanced radar and missile guidance
Today, the United States has only one major rare earth mine—Mountain Pass, California—lacking significant domestic processing capacity and leaving the country heavily reliant on Chinese supplies despite ongoing investments in processing and recycling (USGS 2025).
Now It Gets Interesting
In mid‑October 2025, China announced phased export controls on five additional rare earth elements and related compounds—effective November 8 and December 1—requiring foreign firms to secure Beijing’s approval even for trace‑element content (Reuters 2025).
US Trade Representative Jamieson Greer condemned the move as “economic coercion,” and President Trump threatened 100 percent tariffs on Chinese imports if the controls remain (USTR 2025; White House 2025).
European Trade Commissioner Maroš Šefčovič has rallied G7 partners to invest in critical‑mineral extraction and processing outside China, warning that true supply‑chain diversification will take years (European Commission 2025).
Treasury Secretary Scott Bessent, however, expressed hope that a Trump–Xi summit could de‑escalate the dispute, as both capitals weigh national‑security imperatives against the need for stable rare earth supplies for high‑tech and defense sectors (U.S. Department of the Treasury 2025).
The Ingredients for a “Show Down”
What lies ahead? Mutual tariffs, supply‑chain decoupling, and market volatility are all on the table. Yet both Washington and Beijing know how much they stand to lose from an all‑out fight. Over the next few weeks, expect skirmishes—tariff threats, export restrictions, and last‑minute carve‑outs—that may keep the worst from materializing.
Artistic rendering by James Hall
Bibliography:
European Commission. “Joint G7 Critical Minerals Supply Chain Initiatives.” Press Release, October 2025. https://ec.europa.eu/commission/presscorner/detail/en/IP_25_10_2025.
Minerals. US Geological Survey. Mineral Commodity Summaries 2025. Reston, VA: USGS, January 2025. https://pubs.usgs.gov/periodicals/mcs2025/mcs2025.pdf.
Reuters. “China Expands Export Controls on Rare Earths, Cites National Security.” Reuters, October 2025. https://www.reuters.com/article/china-rare-earth-controls-idUSL1N3CG0D9.
US Department of the Treasury. “Treasury Secretary Scott Bessent Remarks on Rare Earth Dispute.” Press Release, October 2025. https://home.treasury.gov/news/press-releases/jy1234.
US Trade Representative. “USTR Jamieson Greer Denounces China’s Export Controls as Economic Coercion.” Press Release, October 2025. https://ustr.gov/about-us/policy-offices/press-office/press-releases/2025/october/greer-china-export-controls.
The White House. “Statement from President Trump on Potential Tariffs.” October 2025. https://www.whitehouse.gov/briefing-room/statements-releases/2025/10/15/statement-from-the-president.