Rare Earth Metals Have Entered the Trade War

In the midst of the back and forth over tariffs, China decided to switch its bargaining strategy. They have decided to stop raising their tariffs on incoming US goods. Why? They have other bargaining chips. One such chip is to restrict the sale of rare earth metals to the US. Why? Let’s discuss.

So rare earth metals are rare, huh?

Not exactly. Rare earth metals are actually fairly abundant. They are referred to as rare because of the difficulty in extracting them in large quantities. You may also hear rare earth metals referred to as rare earth elements or rare earth minerals. They tend to be found spread throughout other minerals, so extracting just the one type of metal is time consuming and difficult.

Why are rare earth metals important? Do we need them?

Yes, we absolutely need them. They are important in all sorts of common technologies including television and computer screens, electric vehicles, and the batteries in your cell phone. We also need them for some not-so-everyday tech like fighter jets, wind turbines, and satellites.

So, China is using rare earth metals in the trade war?

Yes, China is now restricting the amount of rare earth metals allowed to be sold to the US. China is by far the largest producer of rare earth metals. US companies may be able to find other sources for rare earths metals, but a restricted supply would likely mean higher prices and lower availability of tech of all sorts.

Because of the need for rare earth metals in defense technologies, this restriction could also lead to a national security crisis. We need these minerals to continue producing the tech that protects us. The US will have to do something to make up the difference.