China’s Rare Earth Dominance: How Beijing Won the Trade War Trump Started
CBB News Exclusive Analysis
When U.S. President Donald Trump launched a trade war with China, he famously declared that “trade wars are easy to win.” Yet, months later, the opposite seems true—China has not only weathered the storm but has turned the tables, gaining dominance in one of the most crucial areas of modern technology: rare earth minerals.
Today, rare earth elements have become the backbone of modern industry, powering everything from smartphones and electric vehicles to advanced military weapons. The U.S.–China rivalry over these minerals has quietly evolved into a battle for technological supremacy, and it’s a war that Beijing appears to be winning.
Rare earths refer to a group of 17 chemically similar elements found in the Earth’s crust. Despite their name, they’re not particularly “rare.” They exist across many parts of the world but in extremely low concentrations—making extraction and refining both complex and expensive.
What makes them invaluable is their unique ability to help produce permanent magnets, which are essential for a vast range of technologies. From fighter jets and missile systems to electric vehicles, solar panels, wind turbines, and satellites—virtually every modern device with a motor or electronic component depends on them.
Even in everyday life, these elements play a silent but critical role. They’re in your smartphone’s speakers, your car’s electric windows, your laptop’s hard drive, and even in the sensors that control power seats. In short, if it moves, beeps, or computes, it probably contains a bit of rare earth magic.
A few decades ago, the United States led the world in rare earth mining. During the late 20th century, it was the largest producer, operating several key mines across California and other regions. But things began to change in the early 2000s.
China, which had long known about its own deposits, began investing heavily in mining and refining technologies. In the 1980s, Beijing recognized that rare earths could become a strategic resource in the future. While it lacked the technology then, it poured billions into developing the skills and infrastructure necessary to dominate the field.
By 2005, China had caught up with the United States. By 2010, it wasn’t just a competitor—it was the undisputed global leader, holding nearly 80% of the world’s rare earth production. Today, that figure hovers around 60% of mining output and over 90% of refining capacity.
China’s rare earth production boomed because it was cheaper. Its labor was inexpensive, its energy abundant—thanks to coal—and its environmental regulations were far less strict. In contrast, U.S. operations were expensive, tightly regulated, and heavily scrutinized for pollution. Faced with China’s low-cost competition, American producers simply couldn’t compete. One by one, U.S. mines shut down, leaving only a single active rare earth mine in California—ironically, one that still sends its raw materials to China for refining.
For Washington, it seemed like a win-win at the time. The U.S. could import rare earths cheaply and avoid the environmental damage associated with mining and refining. But that short-term economic convenience has now turned into a major strategic vulnerability.
Extracting rare earth elements isn’t a clean business. The ores are often mixed with toxic metals like uranium and thorium, which can seep into soil and groundwater, contaminating communities and ecosystems. While the U.S. tightened its environmental regulations, China took a more lenient approach. The result: lower costs and higher output.
The environmental price China paid was heavy—many mining towns faced severe pollution—but the strategic payoff was immense. Beijing had cornered the global market, making itself the indispensable supplier to every major economy, including the United States.
In 2018, when Donald Trump initiated his trade war with China, he targeted a wide range of imports, hoping to curb Beijing’s growing influence. He slapped tariffs on Chinese goods, banned companies like Huawei from receiving American technology, and pushed for “Made in America” supply chains.
Initially, China was caught off guard. It didn’t respond immediately, choosing instead to observe and plan. But unlike Washington, where presidential terms shift every four years, China operates on long-term strategic roadmaps. Its short-term plans span five years, its medium-term outlook covers 30–50 years, and its long-term visions stretch over a century.
By the time the Biden administration took over, China had quietly reinforced its economic foundations. It began investing massively in semiconductors, food security, and energy independence—areas that had been pressure points in earlier U.S. sanctions.
So when Trump returned to the political stage in 2025, China was no longer the same adversary. It was more resilient, more self-sufficient, and better positioned to retaliate.
As the tariff war escalated, China unveiled its ace card: rare earths.
Beijing announced new restrictions on rare earth exports, requiring foreign buyers to obtain government approval. The move sent shockwaves through Washington because rare earths are vital to America’s defense industry. They power everything from F-35 fighter jets to missile guidance systems, submarines, and night-vision equipment.
In essence, China had gained leverage over the very materials that keep the U.S. military running.
Experts warned that even if the U.S. started building its own rare earth infrastructure immediately, it would take 15 to 20 years to develop efficient mining operations—and 30 to 35 years to reach China’s current refining capacity. That means Beijing’s lead could last well into 2050 or even 2060.
Moreover, China guards its refining expertise as fiercely as the U.S. protects its microchip technology. Knowledge-sharing between the two superpowers has stopped entirely, deepening their technological divide.
The United States now faces a sobering reality: decades of outsourcing and environmental caution have created a supply chain choke point. While Washington scrambles to revive domestic production, China holds the upper hand not only in supply but in technical know-how.
Efforts to develop rare earth facilities in the U.S., Canada, and Australia are underway, but they remain small-scale and heavily dependent on Chinese technology or processing. The Biden administration has pledged billions to rebuild critical mineral supply chains, yet progress is slow. Mining permits take years, environmental assessments add delays, and the refining process remains a massive hurdle.
Meanwhile, China continues to expand its reach, signing rare earth partnerships across Africa, Southeast Asia, and Latin America—further consolidating global control.
China’s strategy doesn’t end with minerals. It’s building a powerful military and industrial network to defend its economic position. Over the past few years, Beijing has launched three aircraft carriers and expanded its navy faster than any other nation, signaling its readiness for potential confrontation.
Analysts warn that when the United States feels cornered economically, it often resorts to military pressure—a pattern seen throughout history. Beijing, aware of this, has prepared accordingly.
This new phase of the U.S.–China rivalry is not just about tariffs or technology—it’s about long-term survival in a world where economic power equals geopolitical dominance.
The “rare earth war” is a lesson in strategic foresight. While the U.S. focused on quarterly profits and political cycles, China played the long game, investing decades into an industry that now underpins global innovation.
The trade war Trump once called “easy to win” has turned into a battle that may take generations for the United States to recover from. China, on the other hand, continues to leverage its dominance to secure influence not just in technology, but across energy, defense, and global manufacturing.
As both nations move deeper into this economic chess match, one thing is clear: whoever controls rare earths controls the future.
Author: Chick Titus
Source: CBB News
Comments
Post a Comment