Xi Jinping hits Trump where it hurts - US struggles to build weapons as China blocks rare earth exports

Time of India

11 hours ago

Rare earth metals China vs US: China's restrictions on rare earth metal exports are creating a crisis for the US defense industry, impacting production of critical military equipment. American defense firms are facing shortages and delays, with some tapping into emergency reserves. Experts warn that this dependence on China gives Beijing leverage in trade negotiations.
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China Cuts Off Critical Minerals, Crippling US Defense Manufacturing
US Defense Firms Tap Emergency Reserves Amid Mineral Shortage
Small Defense Firms Face Delays
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Experts Warn the US Is Playing Catch-Up
Pentagon Scrambles to Secure Domestic Mineral Supply
Rare Earths Are Now a Tool of Global Power
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The race for global military dominance has taken a sharp turn, as China's tightening grip on rare earth metals is creating a crisis for the United States defense industry, as per a report. With Beijing slashing exports of critical materials essential for building fighter jets, drones, missiles, and more, American companies are scrambling to keep up, and experts warn this struggle threatens national security, according to The Telegraph report.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? 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.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 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.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.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.To gain leverage amid trade tensions and limit US military capability development using Chinese-supplied materials, as per The Telegraph report.They're critical in weapons systems, like missile guidance, radar, satellites, night vision goggles, and aircraft motors, as per The Telegraph report.