Posted on 10/16/2025 8:40:34 AM PDT by MtnClimber
Rare earth elements are often presented as the West’s Achilles’ heel, a fragile point in a sprawling industrial body that a single hostile actor could pierce. The image is dramatic, as seen again in David Dayen’s latest American Prospect essay, “Why China Can Collapse the U.S. With One Decree,” a prime example of rare earth panic porn. It is also misleading. The United States does not stand before a single point of failure. We face a set of supply risks that are real but bounded, and that have already provoked countermeasures whose scale and speed are flattening the risk curve. The question is not whether disruption would hurt. It is whether disruption would permanently disable the industrial and defense core of the United States and its allies. It would not.
Begin with the quantities. The United States uses thousands of tons of rare earth oxides each year, not hundreds of thousands. That is a large number to picture, yet it is a small number relative to other industrial minerals and relative to the scale of the US economy. A great deal of that material is cerium and lanthanum for polishing and catalysts, which are flexible uses that can adjust through substitution and thrifting. The hard cases involve magnets and certain alloying applications, which rely on neodymium, praseodymium, dysprosium, and terbium. These are more exacting, and less forgiving, yet the defense quantities are small in absolute terms. The annual tonnage needed for aircraft, precision guided munitions, and naval propulsion can be stockpiled and sourced from allies in a pinch. That is not bravado. It is arithmetic.
The arithmetic connects to structure. China dominates several links in the rare earth chain, especially separation and magnet manufacture. Domination is not monopoly. Since early 2025, Trump has launched an aggressive national push to rebuild America’s rare earth supply chain through executive orders, Defense Production Act waivers, and strategic partnerships. He directed agencies to fast-track mining permits, prioritize domestic mineral production, and reclassify public lands for extraction. A Section 232 investigation now examines import dependence as a national security threat. The Pentagon has struck major deals with MP Materials, guaranteeing a price floor for neodymium and praseodymium magnets, securing a decade-long offtake, and even taking an equity stake, signaling federal backing of U.S. production. Simultaneously, Trump is pressing trade partners to lock in foreign supply commitments while domestic capacity ramps up. The mining stage is already plural, with meaningful shares from the United States, Australia, Myanmar, and others. Refining has been a choke point, but here too, the picture is changing, and it is changing because prices, policy, and political risk have combined to make new capacity bankable in places Beijing does not control. Investors and governments are not acting on press releases. They are pouring concrete, ordering long lead equipment, and hiring operators for plants in North America, Europe, and allied Asia that separate, reduce, and alloy rare earths. The cadence is not theoretical. It is visible in operating schedules and commissioning timelines.
Skeptics will ask whether such timelines can beat a sudden embargo. They do not have to. There is a tactical layer, and it matters. Inventories in private hands, strategic stockpiles in public hands, and the ability to triage demand toward defense and grid critical applications can bridge gaps measured in months or even a couple of years. Japan’s 2010 experience showed as much. That episode began with a shock. It ended with thrifting, recycling, supplier diversification, and a permanent reduction in China’s market share. The lesson is not that shocks are painless. The lesson is that adaptation is fast when stakes are high and coordination is focused.
A related objection claims that demand growth in electric vehicles and wind will outstrip any plausible non Chinese capacity. The premise again outpaces the facts. Not all EV motors require rare earth magnets. Induction and switched reluctance designs are viable and improving. At its 2023 Investor Day, Tesla engineers announced that the next-generation drive unit will use zero rare earth elements entirely, relying on optimized stator design and high-coercivity ferrite or alternative magnet materials. Trump’s rollback of federal windpower incentives is sharply reducing demand for new wind turbines and, by extension, the rare earth magnets used in their generators. Since returning to office, he has halted offshore wind lease sales, rescinded Biden-era tax credits, and directed the DOE to prioritize fossil and nuclear generation over renewables. As a result, major turbine manufacturers are scaling back U.S. orders, shrinking one of the country’s largest sources of demand for neodymium and dysprosium, rare earth metals vital for high-efficiency turbine motors. Where permanent magnets are superior, thrifting reduces dysprosium loadings without unacceptable loss in performance, a design change that has already spread through leading motor platforms. Wind turbines can use gearboxes instead of direct drive magnet generators, and some manufacturers have moved in that direction when prices spike. These are not ideal solutions in every case, but they relax the constraint. They turn a hard wall into a soft boundary and they buy time for capacity to scale.
How fast can it scale. Faster than many suppose. Mountain Pass in California has ramped output, and more important, it is integrating downstream. Lynas has refined outside China for years and continues to expand. New refineries in Australia and North America are funded, permitted, and in several cases under construction. The magnet stage, long a weak link in the West, is now a priority investment area for automakers, defense primes, and dedicated specialty firms. Some projects will slip. That is normal in heavy industry. The trend line still points toward material new capacity by the middle of this decade, with further gains late in the decade. If Beijing cut exports entirely, the curve would steepen. Politicians would accelerate permits. Lenders would loosen. Prices would rise to clear demand and pull in marginal supply. The physics of solvent markets would do work.
A different line of worry focuses on retaliation. If the US leans on tariffs and industrial policy, will China simply squeeze harder, making Washington back down. In spring 2025 there were tense weeks as each side tested the other. The result was not capitulation by the United States. It was a negotiated cooling off period during which shipments resumed, factories kept running, and American initiatives in mining, separation, and magnets proceeded. The pattern is instructive. China’s leverage is real, but it is bounded by its own need for export revenue, by the risk of killing demand through coercion, and by the credible threat that a prolonged cutoff would spawn permanent rivals. Beijing understands this. It tends to calibrate rather than sever. That is why we see license regimes and quota games more often than outright bans.
What of the claim that domestic efforts are embarrassingly small. That was closer to true a decade ago than it is now. The United States has restarted a mine, funded separators, and stood up magnet lines. The private sector is aligning, from automakers that want resilient motor supply, to energy firms that need dependable generators, to defense contractors who cannot risk a single point of failure in a crisis. Federal support has moved beyond white papers to cost sharing and long horizon purchase commitments that change the risk profile of capital intensive projects. The form is familiar from aerospace and semiconductors. The object is different. It works the same way, by making projects financeable at scale.
Some readers will balk at this entire frame, noting that China still has overwhelming share in processing and magnets today. That is true. The question is trajectory. Market power that rests on price suppression and environmental arbitrage erodes when competitors are provoked to invest, and when buyers tolerate higher prices in exchange for security of supply. We are watching this erosion in real time. It is not fast enough to satisfy those who want instant independence. It is fast enough to invalidate the narrative of inevitable US subordination.
A key conceptual point is often missed. Vulnerability is not a yes or no property. It is a gradient, and prudent policy works on the gradient. Stockpiles increase the time to failure. Design changes reduce critical element intensities per unit of output. Alternate suppliers, even if more expensive, cap the worst case scarcity. None of these measures makes us invulnerable. Together they transform a brittle network into a resilient one. Strategists should argue about the optimal mix, but not about the direction of travel.
Consider defense. The strongest case for alarm is not consumer gadgets. It is the fleet, the air wing, and precision munitions. That is why the right test for policy is simple. Can the United States ensure steady flows of the specific elements and alloys that defense systems require, even during a crisis. The answer is yes if we stockpile the right materials in the right forms, maintain contractual call options on allied output, and preserve surge capacity at home. None of this is easy. All of it is feasible within current budgets and industrial capability. The numbers for defense tonnage, when laid beside global output, make the feasibility clear. The conclusion follows. Rare earths are a constraint that must be managed carefully, not a fatal dependency that dictates strategy.
There remains the insinuation that tariffs as a tool are self destructive. Tariffs raise costs for some US users. The question is whether the tool, used temporarily and selectively, can buy time and bargaining leverage while we build. In 2025, tariff pressure coincided with a visible quickening of investment and alliance coordination around critical minerals. It also generated revenue that can offset transition costs. The case for tariffs, then, is not ideological. It is instrumental. Use them to create room to re base supply chains, then taper as redundancy arrives. That is the logic a pragmatic administration should follow. That is the logic the current administration is following.
What should conservative policy aim to achieve over the next two to five years. First, finish the build out of at least two complete light rare earth separation trains on allied soil, with a third in reserve. Second, secure heavy rare earth separation at pilot scale in the US and at commercial scale with an ally. Third, stand up several thousand tons per year of non Chinese NdFeB magnet capacity with multi year offtakes in transport, defense, and grid applications. Fourth, increase the National Defense Stockpile holdings of NdPr oxide, NdFeB alloy, samarium cobalt alloy, and dysprosium and terbium oxides to cover multiple years of defense demand. Fifth, institutionalize design thrifting in federal procurement so that magnet and motor specifications reflect supply risk. None of these targets is speculative. Each is under way in some form. The task is disciplined execution.
Readers may wonder whether pushing outside China will wreck environmental standards or community relations at home. That is a real risk, and it must be addressed with better process and better technology rather than evasion. Solvent extraction is messy. Alternatives like ion exchange and new separation chemistries can lower impacts. Recycling should be scaled where it makes sense, especially for magnets at end of life in wind and automotive fleets. Communities deserve transparency and compensation when hosting industrial facilities. If we want supply security, we must own the externalities in a principled way. That too is conservative, in the right sense of taking responsibility for the costs of national strength.
Finally, explain the meta point. Alarmism is a counsel of paralysis. It mistakes a dynamic system for a static snapshot. It treats present market shares as permanent laws. It underrates the capacity of free societies, when alerted, to re route their supply lines and adapt their designs. The rare earth story, viewed soberly, is a case study in how open economies respond to coercion. They stockpile. They substitute. They invest. They cooperate with allies. They make themselves harder to hurt. That is what the United States is doing now. That is what we must continue to do.
A Chinese export cutoff would sting. Prices would jump. Some factories would scramble. But within months, inventory and stockpiles would buffer critical lines. Within a year, non Chinese producers would run flat out and ship every kilogram they could separate. Within a few years, the new plants now being built would be online. Design changes would have propagated, weakening the link between output and rare earth intensity. The system would settle into a new equilibrium with less Chinese leverage. Beijing could not bring the system to its knees without also undermining its own industries and permanently ceding market share. That is not a stable strategy for them. It is a stable strategy for us to anticipate and harden against it.
One last point deserves emphasis for those tempted by fatalism. The idea that the US cannot rebuild a mine to magnet chain is contradicted by our history and by our present. We built aerospace supply chains from scratch. We rebuilt semiconductor fabrication at scale. We stood up new vaccine platforms in months when it counted. Rare earths are complex, but they are not beyond us. The choice is not despair or denial. It is work, clearly targeted, rigorously executed, and verified by metrics that matter rather than by social media mood. If we keep that focus, the story of rare earths will be one more case where American and allied ingenuity turned a perceived Achilles’ heel into a source of strength.
You can count on the democRATs to oppose mining and refining. The EPA will have to be reigned in and care will have to be taken in refining plant process selection and facility design.
Yup—this is a classic case where China is not the problem.
Democrats and leftists are.
That was an unusually well-reasoned and written piece. The writer is meaured in his rhetoric, and full explians each point without ignoring or dismissing objections. thank you for that.
I think when the right people (which includes the right money) want movement, brifges are made, and bariers are lowered. AI wants electricity, and Google and Amazon and Microsoft are getting movement are micro-nukes that would have been completely out-of-bounds a decade ago.
1) never allow the Gaia Worshipers to sabotage national security and industrial independence like this again.
2) Cooperate with and pool resources with close allies to the greatest extent possible to ensure independent supply
3) Maintain larger stockpiles for national security. We should be doing the same with grains, metals, oil, weapons, medicines and ammunition
Just start the Greenland invasion already
Stop hyperventilating. period.
The 17 rare earth elements (REEs) are: lanthanum, cerium, praseodymium, neodymium, promethium, samarium, europium, gadolinium, terbium, dysprosium, holmium, erbium, thulium, ytterbium, lutetium (the 15 lanthanides), along with scandium and yttrium. Despite their name, most are relatively abundant in the Earth’s crust, but they are difficult to separate from one another and are not often found in concentrated deposits. Most ree deposits do not have all the rees.
“...difficult to separate from one another...” is an understatement. Often they are chemically very similar to other ree’s, so require strong caustic solvents at high temperature and pressure to separate them. Which produces a lot of very toxic pollutants.
Several sites have been proposed, all shut down by treehuggers.
The EPA will have to be ended.It is a bureacuracy set up for power accumulation first and foremost.
One of the best explicatory articles I have read about anything.
A lot of this scenario will depend on the 2026 and especially the 2028 elections. A pro-China and anti-U.S. Congress and/or administration could stop the whole thing.
For a time, at least, the tree huggers are being separated from the trees.
“China accuses U.S. of deliberately causing panic over rare earth controls, says it is open to talks”
https://www.cnbc.com/2025/10/16/china-trump-xi-rare-earth-tariff-trade-war.html
Not like we don’t have them here, but dims love to practice NIMBY while using their cell phones and driving there coal powered er ah electric cars full of rare earth(actually not so rare) metals
I can’t put a toilet in my house without 100 bureaucrats signing off and 1000s of pages of regulations.
You’re right. No way in hell the bureaucrat class will allow a single shovel of dirt to start new mines and processing centers.
You can count on the democRATs to oppose mining and refining. The EPA will have to be reigned in and care will have to be taken in refining plant process selection and facility design.
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It has been the democrats plan for a long time to de-industrialize America.
Mining and refining them, however, is often very expensive and very complex.
From memory...
China is the ONLY refiner for many of the most important Rare Earth minerals.
“At its 2023 Investor Day, Tesla engineers announced that the next-generation drive unit will use zero rare earth elements entirely, relying on optimized stator design and high-coercivity ferrite or alternative magnet materials.”
So is Tesla’s use going to be “zero” in December because they’re not needed, or not available?
What about Ford’s need?
GM’s need?
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