China Cuts Off Critical Minerals, Crippling US Defense Manufacturing
Rare earth metals, vital components used in everything from missile-guidance systems to night vision goggles, have seen prices skyrocket, some by over 60 times, after China restricted their export earlier this year amid ongoing trade tensions between both the countries, as per the report. With China controlling around 90% of the world’s supply, it has effectively gained a chokehold on the US defense industrial base, as per The Telegraph report.
A spokesman for the China select committee called the situation a “wake-up call” that “underscores just how dangerous our current dependencies are,” as quoted in the report. The spokesman explained that, “The United States cannot afford to have defence supply chains at the mercy of the Chinese Communist Party,” adding, “Congress and the administration must now urgently work together to identify and mitigate these vulnerabilities before they cost American lives,” as quoted in the report.ALSO READ: California, world’s 4th largest economy, stumbles as gas prices could spike to $8, refineries shut—what’s gone wrong?
US Defense Firms Tap Emergency Reserves Amid Mineral Shortage
Assembly lines and labs across the US are feeling the pinch. Bill Lynn, CEO of Leonardo DRS, a major defense contractor, revealed his company has already been forced to dip into emergency reserves of germanium, a rare metal critical to infrared sensors guiding missiles, as per The Telegraph report.
Small Defense Firms Face Delays
Meanwhile, smaller defense firms, especially drone manufacturers, are in an even tougher spot. Unlike larger corporations with stockpiles, many small businesses face looming production halts as delivery delays stretch up to two months due to China’s stringent export licensing, according to the report. Some companies have been asked by Chinese suppliers for detailed product blueprints and assurances their materials won’t be used militarily, requests many refuse, as per The Telegraph report.
Chris Thompson, the vice-president of global sales for ePropelled, said that “Of course we are not going to provide the Chinese government with that information,” as quoted in the report.ALSO READ: Pfizer stock soars as earnings smash expectations, and company raises outlook
Experts Warn the US Is Playing Catch-Up
Experts like Michal Sobolick, a senior fellow at the Hudson Institute, warn the US has “sleepwalked into this situation” and that China’s dominance of the rare metals supply chain will give them the upper hand in trade negotiations over the next few years, as reported by The Telegraph.
Pentagon Scrambles to Secure Domestic Mineral Supply
In response, the US Department of Defense has ramped up efforts to revive domestic rare earth mining and processing, according to the report. Earlier this month, it invested $400 million in MP Materials, which runs the largest rare earth mine in the Americas as the company plans to scale its annual magnet manufacturing capacity from 1,000 metric tons in 2025 to 10,000 metric tons over the next decade, as reported by The Telegraph.
A defence official told The Telegraph, “DoD has invested almost $540m to support the domestic and allied rare earth elements (REE)/critical mineral supply chain,” adding, “DoD is looking forward to continue working with companies across the REE supply chain to ensure that DoD, and the nation, have the secure and resilient supply chains necessary to secure national and economic security for generations to come,” as quoted in the report.
Rare Earths Are Now a Tool of Global Power
Dr Gracelin Baskaran, the director of the critical minerals security programme at the Centre for Strategic and International Studies, explained that, “Rare earths have become the most powerful geopolitical leverage and they’ve become the currency of new geopolitical alliances,” adding, “They continue to be a currency to forge alliances and trade agreements at a time when foreign policy and bilateral cooperation are more complicated than they used to be,” as quoted in The Telegraph report.
FAQs
Why is China cutting off rare earth metals to the US?
To gain leverage amid trade tensions and limit US military capability development using Chinese-supplied materials, as per The Telegraph report.
What are rare earth metals used for in defense?
They’re critical in weapons systems, like missile guidance, radar, satellites, night vision goggles, and aircraft motors, as per The Telegraph report.
