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In the ongoing trade disputes between Washington and Beijing, China’s tight grip on rare earth elements has emerged as a critical issue. President Trump has expressed frustration with China’s continued restrictions on the export of seven essential "heavy" rare earth metals, crucial for various high-tech gadgets and military hardware such as smartphones, electric cars, and F-35 fighter jets.

Last Friday, President Trump accused China of “totally violating” the terms of a preliminary trade agreement reached in Geneva, which included a temporary truce on tariffs set to last until mid-August. Although Trump did not provide specifics, US Trade Representative Jamieson Greer indicated that China’s ongoing restriction on critical minerals is a significant concern. Treasury Secretary Scott Bessent has announced that Trump and Chinese President Xi Jinping are expected to discuss these trade issues soon, including the critical minerals dispute.

According to Bessent, China’s strategy is affecting not only the United States but also the industrial supply chains of India and Europe. There’s uncertainty whether China’s actions are a result of systemic issues or intentional strategy, pending the outcome of high-level talks between Trump and Chinese authorities. However, as NioCorp executive Mark A. Smith points out, China's control over these minerals is part of a calculated move to impact US military readiness and national security.

China's monopoly has led to restrictions on at least 16 critical minerals since 2023, posing a strategic challenge to US defense and tech industries. With China controlling up to 99% of global processing capacity for the seven heavy rare earth metals in question, the ramifications of these restrictions are significant. Simultaneously, the US has tightened export controls on American-made computer chips essential for artificial intelligence, further straining relations.

The Trump administration’s strategies to mitigate this reliance include exploring resource-rich sites such as Greenland and striking mineral rights deals with countries like Ukraine. However, experts maintain that these sites require years before they can substantially contribute to meeting US demand. Instead, a comprehensive strategy involving increased domestic mining and collaboration with allies is seen as essential.

This situation has historical precedents; in 2010, China temporarily halted shipments of rare earth elements to Japan during a territorial dispute, causing widespread disruption. Some officials worry that a similar scenario could unfold with the US amid escalating geopolitical tensions, such as the potential conflict over Taiwan.

Rep. Don Bacon (R-Neb.), a retired Air Force officer and House Armed Services Committee member, stresses the need for the US to prepare for worst-case scenarios. He points out that although threats can often be exaggerated, China's capability to disrupt supply chains should not be underestimated.

In response to the situation, Trump has taken multiple steps within the first 100 days of his presidency to boost domestic mineral production. This includes signing Executive Order 14241, launching a National Critical Minerals Strategy, and fast-tracking permits for key projects.

A recent report by the Center for Strategic and International Studies highlights the vulnerability of the US military to disruptions in heavy rare earth supplies. Moreover, industries depending on these minerals are already feeling the strain, as stockpiles dwindle due to China’s licensing requirements announced in April.

Legislative efforts are in progress to address the supply chain vulnerabilities. For example, Rep. Rob Wittman (R-Va.) supports several bills designed to strengthen the US’s capability to secure and process necessary minerals domestically.

As the situation develops, industry officials urge the US government to ease regulatory and environmental permitting processes that have previously deterred investments in rare earth mining. The next steps by both nations will significantly shape the future landscape of global trade and national security.

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