Exactly. What a sad situation we find ourselves in.

I'd say it's more of an incredibly large vulnerability, but in this case it may be the same thing.

No matter if it's called a threat or a vulnerability, hopefully this'll spur more action towards moving away from China for raw earths and magnets.

Who isn't a "rival" for this administration?

Good thing we found out what our dependencies are on China were before we got in a shooting war with them.

> Even the most cynical of us didn't think he'd lose.

Perhaps a few within the US bubble thought that.

From the outside the asymmetry was pretty clear, the bulk of global manufacturing takes place within China, the bulk of mining and processing of technological vital inputs was under a Chinese umbrella, and the time to rebuild manufacturing and supply pipelines was on the order of a decade plus.

The US is a customer in a world full of customers and potential trade partners, China has found other customers, trade partners have been forced to develop trade outside of former US trade agreements.

It would have taken a long term careful plan to bring back manufacturing, trade dominance and critical supply chains to the US, doable but not exactly Trump's forte.

Why do/did you think he wouldn't lose?

> Even the most cynical of us didn't think he'd lose.

Excuse me? As a sentence it's a fine sentence. It's not anchored in reality. Paul Krugman amongst others has been constantly reminding his subscriber list (448,000) that this is a trade war which only has losers. There is no factual basis to the assertion either only the most cynical of us, or didn't think.

What? He is a moron, and is advised by morons, I mean we are talking about a person that started a trade war with Canada.

Define lose. China is in far more pain, and they are doing the world a favor in sending the signals on what needs to be done elsewhere to reduce the risk of over reliance on a mercantilist state.

Uhm, a lot of us knew America didn’t have very good cards in this fight, definitely not the great cards Trump thought we had. It’s clear to me now that China will be the next world power now that Trump has disassembled the only real advantages we had (high tech innovator, attractor of world talent, world trust).

The reason people were screaming is because they expected America to lose. They were screaming about how stupid it is.

Hey, leave us humanities majors out of it. Most of us have studied critical thinking skills and ethics, which could have easily been used to avoid the various geopolitical messes we’re in right now.

Sounds more like business majors. Who spend their spare time shoving humanities majors into lockers.

> Humanities majors running America couldn’t grok the risk they were taking by incentivizing the outsourcing of these mining and refining processes.

Outsourcing of everything wasn't incentivized, it was forced on the US industry by Wall Street and their Republican friends. Around 2005-2006 there were 2 Congress bills about balancing the US current trade account, both were written and sponsored by Democrats but neither could get enough sponsors for a vote.

At that time, the GOP was full speed "outsource baby, outsource" and Wall Street analysts would bury any company refusing to follow the party line.

What a hilarious world view that humanity majors are running the U.S.

The U.S. is ran by wealthy elites, who run the U.S. in such a way to make themselves more wealthy.

Of course they would outsource every job and business related resource mining operations if that meant more profit in the short term. It’s just good business!

how? crypto trading is illegal in china. where would the RE money go? My understanding is they typically buy RE to get money out of China.

It’s already happened. Someone was making insider trades on crypto which perfectly align to the minute with trumps posts.

You mean John Q Public can afford a house AND doesn't have to listen to uncle Ted's business plan for another Thanksgiving?

Same as what we've done to them with the GPU supply.

It's time for us to grow anti-fragility and independence. And we should expect China to do the same.

Sucks for US soybean farmers, but it would have undoubtedly happened in the future regardless.

We need to distribute critical manufacturing far and wide amongst our allies, and onshore some of the most important pieces. (Though I'm not sure the current admin considers our allies as friends, which is not a great idea during this great reshuffling.)

This assumes we’re able to build a rare earth processing infrastructure in a reasonable timeframe, let’s say 10 years. I would not bet on it! America struggles to build anything quickly today except for software and capital.

This is not the first time they "forced our hand".

https://en.wikipedia.org/wiki/Rare_earths_trade_dispute

Either were not actually that bothered by the restriction and are using this to gin up conflict, or we've been this incompetent at responding to existential threats for over a decade and a half, including multiple presidents, both parties holding power, and this current admin's first term.

I am not really excited about either situation.

The US is second by manufacturing output after China. It's just not true that "US produces very little".

I think it’s a bit like TMSC and bringing back chip manufacturing. Sounds easy in theory till you go to do it.

My cursory understanding of why we don’t process this stuff anymore is environmental degradation more so than money.

Happy to ship the externalities elsewhere while it cheap and we’re on good/friendly terms.

They're not rare but you have to process them and basically only China does. No clue as to the share of the equipment that is rare earths but if you need a component you need it. Doesn't matter if it's small or in theory cheap. If it's unavailable you don't have a substitute.

This has all been known for over a decade but no one invested in an alternate supply chain.

RE elemets mining/refining is ~80% China dominated, even US and other producers mined ores go to China for refinement.The concentrations are ridiculous for the process, think several tons to extract some kilos. Then theres the heavy RE and light , with some being produced as byproducts of other refinement/industrial processes where once again the top producer is China , who due to their scale have essentailly commoditized the production. Thats why magnets at cents instead of several dollars or tens of dollars.

As for all those EV/consumer and Mil products its not raw RE being utilised but speciality alloys that are worked to produce whatever the material science requires , where once again there one industrial producer.

Thats what the whole chain part of supply chain comes in , similar to why its easier and cheaper to manufacture iphones in Schenzen; all the refining/alloys/smelting is in one location with the skilled workforce and advanced methods that have been iterated over the last 30 years.

As to what % go into mil products, several kilos of this several of that forged into speciality alloys at commodity prices vs doing it at artisinal mining prices and those billion dollar weapon systems become tens or hundred billion dollar systems.

As you said, rare earth elements aren't really rare--they are very abundant. But they are mixed in with themselves (there's 17 of them) and lots of other elements. Think of it like if you had 50 different colored sands and had huge amounts of all of them, then mixed them all up. The rarity is that you're not going to go through that sand and find a big patch of blue sand.

There's plenty of them, and all over the world. It's also important to separate the mining of rare earths from the processing/refining. 60% of REEs come from mines in China. But 90% of the processing is done in China (for some of them, heavy REEs, 100% of it is done there).

It wasn't always this way, but started to change in the 80s and 90s as Chinese firms were able to process rare earths at much lower costs. It was a mix of things--labor rates, lax standards, as well as state subsidies (the latter shouldn't be overlooked).

It's difficult to reopen processors, and starting up new ones requires a lot of time and money. We can do it, we just can't flip a switch and start it up. Also, China has developed a lot of new technology to do it and have export controls on the tech. Also, we have much more severe environmental standards these days that would make it even more difficult to get going.

From a companion article: "For instance, an F-35 contains more than 900 pounds of REEs, an Arleigh Burke–class DDG-51 destroyer requires approximately 5,200 pounds, and a Virginia-class submarine uses about 9,200 pounds."

it's rare compared to other stuff. plus you have the issue of refinement.

Rare earths are not rare on Earth, but production of rare earth metals is rare and difficult and almost exclusively done by China. There are two other factors that make this announcement important though. One is the use of the foreign direct product rule, which means China is requiring all use of rare earths produced by China to be tracked and require approval, and all military applications are not going to be approved (why would China arm it's competitors?) The other factor is that while things like F-35's may only use a few hundred pounds of rare earths each and there are not many of them, things like smart bombs and semiconductors need rare earths and there are a LOT of those. If China can truly cut the US from China's production, it's likely going to greatly reduce the US's current attempts to scale up both weapons production and the more advanced semiconductors (like GPU's for AI) until the US can get alternate sources. It will take 5-10 years to build alternate sources (some small pilot projects are near completion, but scaling up will take a while), so during that time the US could be short on weapons and compute power. The US military has done some stock piling of rare earths, but it's a fairly small stockpile. So worst case is no weapons or AI for the US for some time.

There will also be consumer effects. EV's, drones, phones, TV's, RC cars, and more all use rare earths or rare earth magnets. Because rare earths were cheap before, most quality electric motors now use them. China can now cut off those uses also if they want to.

How effectively China can halt sales to the US is debatable. The CIA could start a toy manufacturer front company and buy rare earth magnets for example. China may eventually find out and cut them off, but then the CIA can just start a new front company. Buying from European or Asian companies as intermediaries may be difficult to enforce. If a war started over Taiwan, China could just cut off all shipments to the world. So there is perhaps a five year window here where China can exercise power via rare earths. Beyond that alternate sources will likely be in place.

So one thing China is "saying" here is that if the US is going to cut China off from advanced computer chips, China is going to make it impossible to make those chips so the US won't have them either. This could be enough to bring a sudden halt to US AI investment. It would definitely introduce a big new uncertainty.

The US has an abundance of rare earth and many other metals, substantially more than all but a few other countries. Aggressive and cynical environmental activism that buries mine development in decades of lawsuits has made it financially infeasible to develop domestic resources to the point where even mineral exploration is rarely done in the US anymore. No point in exploring for minerals if you won’t be allowed to mine them.

In principle, metal refineries are not that difficult to build and operate. It isn’t rocket science and could be done relatively quickly if the US really wanted to. In practice, any attempt at doing so will be buried in decades of cynical blocking actions by political activists. It wouldn’t be surprising to find out the parties blocking this are substantially albeit indirectly supported by adversarial countries.

It is no different than why we can’t build housing. Unless the US adopts an attitude of telling the haters to go pound sand because building things is important to the furtherance of civilization, nothing will happen.

We as a culture and society give veto power over damn near everything to far too many people that couldn’t be trusted with authority over a lemonade stand.

Without US military intervention and support, Taiwan and Ukraine would fall. Then dozens of other islands in the Pacific as well as Eastern Europe. The U.S. economy and technological growth would be devastated if Taiwan (and TSMC) falls to the Chinese. This is a WW3 scenario.

My assumption is that the military supply chain in any country is a tiny percentage of rare earth supply, compared to the huge fraction that’s used in commercial applications. And since the military is prioritized and a perfect embargo doesn’t exist, “choking off the supply to crush the military” is almost impossible.

A strong US keeps China out of Taiwan and Russia out of Europe, so at least there's that.

The problem is if the US thinks they’ll be weaker in the future then it would be in their interest start the war sooner instead of waiting. I think it’s China who is taking the long term approach.