China is overplaying its hand on rare earth materials

Excerpt

When President Trump travels to Beijing early next year to finalize a new trade deal, China will deploy one of its favorite pressure tactics: restricting exports of rare earth elements.  

Last month, The New York Times’s Thomas Friedman warned that China’s threat to cut off rare earth exports could “trump Trump’s tariffs tenfold.” He’s right that Beijing sees these minerals as strategic leverage, but the real story is more complicated. The market is small, innovation is closing the gap, and allied countries are building alternative supply chains faster than many realize. 

Critical minerals encompass dozens of materials essential to modern technology, from lithium and graphite for batteries to gallium for semiconductors. Rare earth elements are a specific subset of 17 metals within this broader category. While China has important leverage points with other critical minerals, rare earth elements are China’s negotiating weapon of choice. 

Elaine Dezenski is the senior director and head of the Center on Economic and Financial Power at the Foundation for Defense of Democracies , where Daniel Swift is a senior research analyst and a retired U.S. diplomat.