How The U.S. Can Reduce Dependence On China's Rare Earth Minerals

Forbes

07-07-2025

American leaders in Washington cannot continue to rely on Beijing for materials while the Chinese are emerging as a military rival. The only way out of a potentially dangerous situation, from an American perspective, is to drastically reduce dependency on China, especially when it comes to the critical minerals sector.
China's commerce ministry issued a statement on July 4 saying that Beijing and Washington have accelerated efforts toward the agreement reached during the June 9-10 trade talks in London, all while warning the Trump administration against undermining their "hard-won" consensus. American and Chinese officials agreed upon a framework to implement the Geneva agreement in early May, expediting rare earth shipments to the United States. In a reference to its own rare earth export curbs, the Chinese commerce ministry said that the Chinese government "is currently reviewing and approving eligible export license applications for controlled items." Confirming reports that the United States resumed exports of chip design software, ethane and jet engines, the statement added that the White House had also undertaken reciprocal steps "to lift a series of restrictive measures against China and has informed China about the relevant situation.'
This diplomacy underscores how China has been able to effectively counter U.S. restrictions on semiconductor sales and technology transfers. The Trump administration's negotiations with the government of President Xi Jinping are a necessary short-term step to avoid disruptions to the American economy and its military superiority. But it must be treated as an extremely temporary measure because the deal struck last month perpetuates U.S. dependence on China for critical minerals.
Over the past couple of years there has been a massive surge in high-frequency Chinese air and naval exercises, especially incursions into Taiwan's Air Defense Identification Zone. Such incursions surged with nearly 450 flights recorded in mid‑2024 and continuing activity into the current year includes live-fire drills, amphibious landings, rocket force launches, and aircraft carrier operations encircling the island nation. Last summer, the Chinese navy held wargames with their Russian counterparts in the waters off the Aleutian Islands. Then this June, for the first time, both of China's two carrier strike groups operated together entering the second-island chain near Japan. Earlier this year, in February, a People's Liberation Army task group carried out live-fire navy drills in Australia's Exclusive Economic Zone in the Sea of Tasman.
U.S.-Chinese diplomacy can help manage tensions, but it is extremely unlikely that Beijing will give up its strategic military plans. While the U.S. remains a superior military force, the United States remains vulnerable due to economic dependence on Chinese rare earth mineral supply chains. The American strategy has been to place restrictions on semiconductor exports as part of a broader effort to curb access to advanced technologies, along with discouraging investments. More recently, tariffs have become yet another element of trade restrictions. Washington has also been actively promoting India as a strategic alternative to China's global-scale manufacturing prowess with the aim of diversifying supply chains, de-risking economic dependence, and countering Beijing's industrial dominance.
Considering that Beijing has had a major head start in the strategic field of rare earth minerals, the United States will have to work hard on multiple fronts to alter the current reality that the People's Republic controls 60–90% of global refining and processing capacity for critical minerals and raw ores mined elsewhere (e.g., Australia), which also have to be sent to China for processing.
Current efforts are scattered across several different arenas: extraction and refining, public investment and market incentivization, supply chains involving allied and partner nations, technological innovation, downstream industrial strategy, trade policy and strategic reserve, and transparency and market reforms. The Trump administration will need to weave these various lines of efforts into a grand strategy on critical minerals security.
One key strategic ally in this endeavor is Kazakhstan, which can become a reliable source of 17 of the 30 minerals critical for the U.S. economy. Astana can also serve as a geopolitical partner in the forging of non-Chinese supply chains.. Most importantly, Kazakhstan, while maintaining relations with its neighbors Russia and China, has a demonstrated desire to work with the United States and its western allies.
The Eurasian landmass is thus a major battleground in great power competition, particularly between the United States and China. Beijing's objective is to maintain close economic relations with Washington while at the same time it grows its military power to undermine the U.S. global position. America cannot accept this situation. And the key to dealing with it entails making critical minerals security a top national priority.