Instead of broad subsidies across all critical minerals, a more effective strategy is to target the ~25 materials that China has explicitly used as leverage through export controls. This "power law" approach concentrates capital on acute vulnerabilities identified by China's own actions, rather than diluting it across a wide, less-critical list.

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.

To counter China's dominance in rare earths, subsidies and tax credits are not enough. The US must also use tools like the Defense Production Act to create long-term, guaranteed demand contracts. This provides stability for private companies to withstand the price volatility caused by Chinese market manipulation and dumping.

To combat China's dominance in critical minerals, the Department of Energy is proactively funding dormant US resource companies. It provides a 'startup package' including an equity check, an expedited permit, and a guaranteed offtake agreement with a floor price to de-risk and fast-track projects.

The deal with rare-earths miner MP Materials goes beyond simple subsidies. The government has agreed to purchase 100% of the magnet offtake and has also guaranteed a profit margin for the company. This structure effectively removes all market risk and discipline for private investors.

To combat China's ability to dump products and destabilize markets, the US government should act as a buyer of last resort for critical materials like rare earths. This would create a strategic reserve, similar to the petroleum reserve, ensuring price stability for domestic investment and manufacturing.

The US government's mandated, decades-long sale of its helium reserve at a fixed price destroyed the market incentive for private companies to explore for new sources. This policy created an artificial price ceiling and a guaranteed supply, making private investment in exploration economically unviable and leading to long-term supply fragility.

China achieved its near-monopoly on rare earths not by chance, but through a long-term state-sponsored strategy. This involved providing capital to key firms, funding overseas acquisitions, banning foreign ownership of domestic mines, and consolidating the industry to control global prices.

China maintains dominance not by restricting supply, but by demonstrating its ability to flood the market at will. This uncertainty makes new Western mining projects financially non-viable without significant government support like price floors or guaranteed offtake agreements, effectively killing competition before it starts.