The shift to a less adversarial China policy may be a strategic maneuver to avoid supply chain disruptions. The U.S. appears to be biding its time—likely for 5+ years—to wean itself off dependence on Chinese rare earth minerals, which are critical for both industry and defense manufacturing.

China's export ban on rare earth metals, critical for everything from iPhones to fighter jets, exposes a major US vulnerability. The solution is to treat domestic mining like vaccine development—a national security priority that requires fast-tracking the typical 30-year regulatory process for opening new mines.

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.

China's strategy involved not only extracting and processing rare earths but also creating domestic demand through EVs and wind turbines. This holistic approach, combined with state-owned enterprises that don't require profitability, created an unbeatable market position.

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.

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.

China is restricting exports of essential rare earth minerals and EV battery manufacturing equipment. This is a strategic move to protect its global dominance in these critical industries, leveraging the fact that other countries have outsourced environmentally harmful mining to them for decades.

Attempting to out-mine, out-process, and out-spend China in traditional rare earth production is a losing strategy. The U.S. can gain an advantage by investing in breakthrough technologies that bypass China's existing chokehold on the supply chain.

America's vulnerability in the rare earths supply chain stems from internal failures, not a lack of domestic resources. A 29-year average for mining permits, cuts to research funding, and alienating allies have created a strategic dependency that could have been avoided.