"The rare earth shortage" in the US is not a technological issue, but a byproduct of the institutional cycle.

The biggest problem in the US is the lack of long-term policy; it changes every 4 or 8 years, and there is no effective national economic system in place.

The issue of rare earths has been talked about for over a decade, but no one has done anything about it yet.

It's hard to imagine who will do it in the future. The capital groups are unwilling to do things that are laborious and unprofitable, and the US doesn't have state-owned enterprises.

Everyone knows rare earths are important, but the global rare earth industry is only hundreds of billions of dollars a year (the total market value of the rare earth industry chain, including the entire value of the supply chain from mineral mining to end-user applications). In 2024, it was about 57 billion USD, and it is expected to exceed 60 billion USD in 2025.

According to the official data from the U.S. Geological Survey (USGS) January 2025 "Mineral Commodity Summaries 2025", the total value of rare earth consumption in the US per year is approximately 430 million USD, consisting of the following two parts:

Domestic production of rare earth concentrates: 260 million USD (45,000 tons of REO equivalent)

Imported rare earth compounds and metals: 170 million USD (about 8,000 tons)

In other words, the US consumes only 500 million USD worth of rare earths per year, while the planned investment is 300 billion USD (estimated by the Department of Energy). According to the current annual demand in the US, the payback period would be as long as 600 years (not counting demand growth and inflation).

For American capital groups, the annual investment would need to be in the tens of billions or even hundreds of billions, with a cycle of at least 10 years, sometimes even longer. However, the return is minimal. After 10 years, the market size might only reach around 100 billion USD (not profit), and this is just the total market size of the global rare earth industry chain of around 100 billion USD - the investment demand (300 billion USD) and the US' essential market size (5 billion USD/year) are severely out of balance, making the commercial sustainability zero, which is a losing business.

This is a typical long-term investment, slow to take effect, and a negative profit industry.

Political slogans and implementation are two different things.

Certainly, for the die-hard fans of the US, including the Trump supporters within the US, this is not a problem.

As long as Trump makes a few big promises, everything will be fine.

Original: www.toutiao.com/article/1848000448558080/

Statement: This article represents the views of the author.