Uncommon elements crucial to Trump's commercial conflict: Understanding rare earth minerals and their significance.
In the ongoing US-China trade war, the battle over rare earth minerals is a significant hurdle. Back in May, President Donald Trump hinted at annexing Greenland, a resource-rich territory with a massive reserve of critical minerals – including rare earths – beneath its ice sheet. Trump has also signed a "rare earth deal" with Ukraine.
The dispute over rare earths predates the current administration. China has long held near-total control of these materials, which is part of their broader industrial policy.
Rare earths are a group of 17 metallic elements, including scandium, yttrium, and the lanthanides. Contrary to their name, these materials are somewhat abundant in the Earth's crust but are costly and environmentally damaging to extract and process.
Rare earths have wide-ranging applications in our daily lives – from smartphones to wind turbines, LED lights, and flat-screen TVs. They are also essential for the US military, found in F-35 fighter jets, submarines, lasers, satellites, and Tomahawk missiles, among other weapons and technology.
The International Energy Agency states that 61% of mined rare earth production comes from China, with China controlling 92% of the global output during the processing stage. The US has only one operational rare earth mine in California.
However, the Trump administration's tariffs on China has disrupted the process of sending heavy rare earths to China for separation. China has shown a willingness to use its control over rare earths as a weapon. As of now, the US is heavily reliant on China for rare earths separation.
In late April, Trump claimed that China violated a trade truce by maintaining export controls on seven rare earth minerals. This move could have a significant impact since, between 2020 and 2023, 70% of US imports of rare earth compounds and metals came from China.
Apart from China, rare earths are also a focal point of US foreign policy with Ukraine, Greenland, and Saudi Arabia. However, Ukraine's rare earth mining industry is still in its infancy, and it's unclear what resources are economically viable there.
In conclusion, the development of a domestic rare earth industry is crucial for the US to reduce dependence on Chinese imports, enhance national security, and potentially ease trade tensions. However, developing this industry faces challenges in terms of time and resources.
The ongoing trade tensions between the US and China extend to the control of rare earth minerals, critical elements also sought in US foreign policy with countries like Ukraine. These minerals, though somewhat abundant, are costly and environmentally damaging to extract, and are essential for various technologies including military equipment such as F-35 fighter jets, submarines, and missiles. Despite the US having an operational rare earth mine in California, over 90% of the global production during the processing stage originates from China, making the US heavily reliant on China for these materials, a potential weapon in the ongoing trade war.
