While the US focuses on quarterly returns, China has spent decades investing in and controlling the supply chain for critical minerals essential for technology and defense, securing long-term leverage.

For 30 years, China identified rare earths as a strategic industry. By massively subsidizing its own companies and dumping product to crash prices, it methodically drove US and global competitors out of business, successfully creating a coercive dependency for the rest of the world.

China is leveraging its 90% control over rare earth processing not just against the US, but globally. By requiring licenses from any company worldwide, it creates a chokehold on high-tech manufacturing and establishes a new template for economic coercion.

China demonstrated its significant leverage over the U.S. by quickly pressuring the Trump administration through a partial embargo on rare earth metals. This showcased a powerful non-tariff weapon rooted in its control of critical mineral supply chains, which are also vital for defense applications.

A critical vulnerability for scaling up directed energy weapons is the supply chain for rare earth minerals like terbium and dysprosium. With China controlling up to 90% of the global supply, this creates a significant geopolitical dependency and risk for Western defense manufacturing.

While headlines focus on advanced chips, China’s real leverage comes from its strategic control over less glamorous but essential upstream inputs like rare earths and magnets. It has even banned the export of magnet-making technology, creating critical, hard-to-solve bottlenecks for Western manufacturing.

The urgent need to replenish munitions for Ukraine and prepare for a Taiwan contingency is directly undermined by dependency on Chinese rare earths. Chinese export control laws can automatically deny sales to defense users, creating an acute short-term vulnerability for a Western defense industrial base holding limited stockpiles.

China's dominance in rare earth and critical mineral supplies, which are vital for US weapons and tech manufacturing, gave President Xi a strategic advantage over President Trump in their recent summit. This economic chokehold shifted the traditional power dynamic between the two nations.

China's global dominance isn't in owning mines, but in controlling the midstream refining and smelting processes. This creates a critical choke point for the West's supply of essential materials for defense, AI, and electrification, as they control 50-98% of processing capacity for key metals.