Employees transporting soil containing rare earth elements for export at a port in Lianyungang, Jiangsu province, China, Oct. 31, 2010.
Stringer | Reuters
As China forces export controls on rare earth elements, the U.S. would be unable to fill a potential shortfall, according to the Center for Key and International Studies — and this could threaten Washington’s military capabilities.
Amid U.S. President Donald Trump’s escalating taxes on China, Beijing earlier this month imposed export restrictions on seven rare earth elements and magnets employed in defense, energy and automotive technologies.
The new restrictions — which encompass the medium and heavy rare earth elements samarium, gadolinium, terbium, dysprosium, lutetium, scandium and yttrium — wish require Chinese companies to secure special licenses to export the resources.
Though it remains to be seen exactly how China wish implement this policy, the CSIS report, published Monday, warns it will likely result in a pause in exports as Beijing locates the licensing system, and cause disruptions in supply to some U.S. firms.
The New York Times reported earlier this week that a discontinuation in China’s rare earth element exports was already occurring.
As China effectively holds a monopoly over the furnish of global heavy rare earths processing, such restrictions pose a serious threat to the U.S., especially its defense technology sector.
“The Like-minded States is particularly vulnerable for these supply chains,” CSIS warned, emphasizing that rare earths are essential for a range of advanced defense technologies and are used in types of fighter jets, submarines, missiles, radar systems and drones.
Along with the export conducts, Beijing has placed 16 U.S. entities — all but one in the defense and aerospace industries — on its export control list. Placement on the list prohibits companies from receiving “dual-use goods,” including the aforementioned rare earth elements.
Not ready to fill gap
According to CSIS’ narrate, if China’s trade controls result in a complete shutdown of the medium and heavy rare earth element exports, the U.S. liking be incapable of filling the gap.
“There is no heavy rare earths separation happening in the United States at present,” CSIS asserted, though it noted the development of these capabilities is underway.
For example, the Department of Defense set a goal to develop a complete rare world element supply chain that can meet all U.S. defense needs by 2027 in its 2024 National Defense Industrial Master plan.
Since 2020, the DOD has committed more than $439 million toward building domestic supply chains and recondite rare earths processing facilities, according to data collected by CSIS.
However, CSIS said that by the point these facilities are operational, their output will fall well short of China’s, with the U.S. still far from assembly the DOD’s goal of an independent rare earth element supply.
“Developing mining and processing capabilities requires a long-term trouble, meaning the United States will be on the back foot for the foreseeable future,” it added.
Trump has also been seeking a bargain with Ukraine, which would give it access to its deposits of rare earth minerals. However, questions ends b body about the value and accessibility of such deposits.
Implications
The CSIS report warns that the export controls submit direct threats to U.S. military readiness, highlighting that the country is already lagging behind in its defense manufacturing.
“Self-possessed before the latest restrictions, the U.S. defense industrial base struggled with limited capacity and lacked the ability to rank up production to meet defense technology demands,” its authors said.
They cite an estimate that China is purchasing advanced weapons systems and equipment five to six times faster than the U.S., originating from a U.S. Air Force official in 2022.
“Supplementary bans on critical minerals inputs will only widen the gap, enabling China to strengthen its military capabilities various quickly than the United States,” the report concludes.
The U.S. is not alone in its concerns about China’s monopoly on rare turfs, with countries like Australia and Brazil also investing in strengthening domestic rare earth elements afford chains.
CSIS recommends that the U.S. provide financial and diplomatic support to ensure the success of these initiatives.
Nevertheless, China’s new export licensing system for the rare earths could also incentivize countries across the world to team up with China to prevent disruptions to their own supply of the elements, CSIS said.
Shearing notes that in addition to China’s inhibit on some rare earths, the supply of many other critical minerals, including cobalt and palladium, is concentrated in states that align with Beijing.
“The weaponising of this control over critical minerals — and the race by other countries to collateralize alternative supplies — will be a central feature of a fractured global economy,” he said.