Americans when they run out of rare earths pic.twitter.com/NODyLdJHn3
— Yakubian Thought and Theory (@Mind_of_yakub) June 7, 2025
American’s when it comes to Rare Earth magnets
1. Collapse of U.S. Production & China’s Emergence
- The Mountain Pass mine, the U.S.’s only major rare earth production facility, wound down in the late 1990s due to:
- Environmental violations and cleanup costs,
- Uncompetitive pricing from low-cost Chinese supply,
- By the time China was poised for WTO accession, it controlled over 90% of the global rare earths market, not just at the mining level, but across the entire value chain, including extraction, smelting, separation, and refining.
2. China’s Deep Technological Moat in Rare Earths
China’s dominance wasn’t merely in raw material supply, it stemmed from a deeply entrenched technological ecosystem:
- Over 20,000 patents held by Chinese firms and state entities cover every step of rare earth extraction, processing, smelting, and refining.
- China graduates over 2,000 specialized engineers annually from 35+ universities focused on rare earths — including materials science, mechanical engineering, metallurgy, and separation chemistry.
- This educational-industrial complex gave China a sustainable edge in innovation and efficiency.
3. Refining Capabilities and Strategic Military Implications
- Japan, a major U.S. ally, can only refine 2 of the 7 key rare earths and only up to 70% purity, sufficient for automotive-grade batteries, but inadequate for advanced military uses.
- In contrast, China’s cascade refining process achieves 99.99% purity, essential for:
- Samarium-Cobalt magnets, critical for missiles, fighter jets, submarines, and space systems.
- Advanced sensors, targeting systems, and radar.
- No Western country had an equivalent capability at the time of WTO negotiations, strategic vulnerability was a growing concern, though addressed mainly through soft power engagement (i.e., integrating China into a rules-based trade system).
4. Gallium, Aluminum, and Radar Technology
Another pivotal rare earth is Gallium, used to make Gallium Nitride (GaN) semiconductors for AESA radars (found in F-35s, Patriot systems, naval radar, etc.).
- Gallium is a byproduct of aluminum smelting, requiring:
- Ultra-high-grade aluminum production,
- At massive industrial scales.
- China is not only the world’s largest aluminum producer but also the largest consumer, allowing it to absorb all byproduct gallium domestically.
- In contrast, the U.S. lacks the industrial scale to produce gallium competitively or in sufficient quantities for military or industrial needs.
5. WTO Accession and Strategic Supply Chains
- The U.S. supported China’s WTO accession for several overt reasons:
- Access to Chinese markets for U.S. goods,
- Integration of China into the global rules-based system,
- Hopes of encouraging economic and political liberalization.
- But implicitly, it was also a hedge against unilateral resource nationalism:
- By binding China to WTO disciplines, the U.S. hoped to deter disruptive behavior, like export bans or price manipulation.
This calculation proved futile after the Trump administration’s tariff war upended the rules-based order, exposing the fragility of multilateral trade institutions and escalating economic confrontation.
China responded with countermeasures that included signaling rare earth export controls, and the earlier optimism about WTO mechanisms curbing strategic resource leverage diminished significantly.
