U.S. risks defense capabilities due to reliance on China's rare earths supply

In the context of escalating trade tensions between the United States and China, significant export restrictions have been imposed by China on seven critical rare earth elements essential for a variety of advanced technologies, particularly in the defense sector. These restrictions, which began earlier this month, require Chinese companies to obtain special licenses for exporting these resources, leading to anticipated disruptions in supply for U.S. firms. The Center for Strategic and International Studies (CSIS) highlights the monopoly China holds over the global supply of heavy rare earth processing, which poses direct threats to U.S. military readiness as these elements are vital for fighter jets, submarines, missiles, radar systems, and drones. Despite efforts by the U.S. Department of Defense to establish a domestic supply chain for rare earth elements by 2027, the CSIS report states that the U.S. current capabilities are inadequate to fill any potential gaps from a complete shutdown of Chinese exports. The ongoing development of heavy rare earth processing facilities in the U.S. will likely fall short of meeting the DOD's goals, exacerbating the situation. The DOD has invested over $439 million since 2020 towards building these supply chains, but experts emphasize that developing mining and processing capabilities require a long-term effort that leaves the United States at a disadvantage. In addition to the U.S. being vulnerable, other countries such as Australia and Brazil are also attempting to bolster their own rare earth supply chains, recognizing the risks associated with relying on China. The report notes that China’s licensing system could encourage countries globally to align with China in order to secure their own access to these essential minerals. Moreover, the threats posed by the export controls extend beyond just rare earth elements, as many critical minerals crucial to technology and defense, like cobalt and palladium, are also dominated by nations that are politically aligned with Beijing. The long-term implications of these restrictions could severely impact U.S. military operational capabilities, prompting calls for increased financial and diplomatic support for domestic initiatives in rare earth supply chains. As the U.S. continues to grapple with these challenges, the question of reducing dependency on China for essential resources remains a pressing issue that requires immediate and strategic attention.