Politicians predictably declare initiatives for domestic production of critical goods like munitions or rare earths when dependencies are exposed. However, these declarations rarely translate into effective action, suggesting we must learn to manage economic entanglement as a form of mutual deterrence rather than wish it away.

The strategic competition with China is often viewed through a high-tech military lens, but its true power lies in dominating the low-tech supply chain. China can cripple other economies by simply withholding basic components like nuts, bolts, and screws, proving that industrial basics are a key geopolitical weapon.

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.

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.

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.

Facing China's export restrictions on rare earth metals, the U.S. immediate strategy is "ally-shoring": striking a major deal with Australia. This secures the supply chain through geopolitical partnerships as a faster, more pragmatic alternative to the long process of building domestic capacity from scratch.

While China's control over rare earths is a known risk, the U.S. is equally dependent on China for common but critical goods like car seats and children's books. An export ban on these seemingly non-strategic items could create immediate and widespread political pressure.