After US President Donald Trump took office and launched a tariff war against China, China announced in mid-April that it would suspend exports of a variety of critical minerals and magnets. This move could cut off the supply of crucial components for global automobile manufacturers, aerospace manufacturers, semiconductor companies, and military contractors. Magnets made from rare earth metals are essential for manufacturing automobiles, offshore wind turbines, drones, missiles, fighter jets, and many other advanced finished products.

According to The New York Times, Jim Hedrick, a former expert on rare earths at the US Geological Survey and now president of American Critical Materials Corporation, believes that even if an immediate and sustained alternative plan is initiated, the US will need five years to摆脱 dependence on China. He pointed out that "China has had a 30-year head start in rare earth production."

Rare earth elements are not actually rare. Their scarcity is largely due to the challenges involved in separating, processing, and refining these elements. Since 'rare earth elements' refer to 17 chemically similar elements in the periodic table that are adjacent to each other, this means they are very difficult to separate and purify in practice. For instance, obtaining higher concentrations of pure praseodymium or neodymium, which are used to manufacture high-power magnets ranging from maglev trains to wind turbines to missiles, is extremely challenging. Therefore, due to the challenges in refining rare earth elements and the associated significant energy, resource, and pollution risks, rare earth production has historically been concentrated in only a few places.

China's restriction on rare earth exports directly targets the vital industries of numerous key sectors in the US. This event highlights China's central position in the global critical mineral supply chain. With a 30-year head start in rare earth production, China holds key links in the global rare earth industrial chain, not only dominating resource extraction but also leading in separation, processing, and refining technologies. This advantage gives China important话语权 in international trade negotiations, forcing the US to pay a heavy price for its reckless initiation of a trade war, and warning other countries to respect rules and avoid unilateralism and trade bullying when handling international trade relations.

The localization of critical mineral industries in the US is not without obstacles. On one hand, the initial investment in critical mineral industries is enormous, requiring substantial capital infusion from exploration to mining to building processing facilities, which is no small burden for US companies; on the other hand, strict environmental requirements pose challenges, as critical mineral mining and processing can cause environmental pollution. US environmental regulations are stringent, making it extremely difficult for companies to meet environmental standards while maintaining economic benefits. Additionally, the shortage of specialized talent is another issue. Long-term reliance on imports has left the US lacking in a well-rounded professional training system for related fields, making it difficult to quickly build a high-quality workforce in the short term.

The US will become more proactive in rallying allies to build new critical mineral supply alliances. The US may strengthen cooperation with resource-rich countries such as Australia and Canada, pushing for the establishment of organizations akin to a 'rare earth alliance' to reshape the global critical mineral supply chain and reduce dependence on China. However, such cooperation also faces numerous challenges. Although Australia and Canada have resources, they lag behind China in processing technology and industrial support, requiring significant time and resources for technological research and industrial upgrading to establish an efficient and stable supply chain. Moreover, these countries will also consider their own interests when cooperating with the US and will not act entirely according to US wishes, resulting in high coordination costs within the alliance.

Original Source: https://www.toutiao.com/article/1834774351839235/

Disclaimer: This article solely represents the author's personal views.