The trade war ramps up as China is considering curbing its export of rare-earth metals. Since these metals are essential in electronics, solar panels, and electric vehicles, China puts pressure on President Joe Biden’s plans to switch U.S. energy production from fossil fuels to renewables.
Rare-earth metals are atomic elements crucial to various high-technology industries such as semiconductors used in electronics, solar panels, and batteries used in electric vehicles and mobile phones.
Without these minerals, IBM, Google, Tesla, Microsoft, Apple, Amazon, and all other high-tech companies could not exist. Considering that these companies make up more than 80% of the total value of the S&P 500, it is no exaggeration to say that rare-earth minerals are strategic assets vital to national interests.
The United States used to be one of the dominant players in this market. However, due to America’s decades-long China First policy, China now holds 80% of global reserves. The United States imports 80% of the elements it consumes from the communist regime.
One of the people raising the alarm about the risk China’s dominance poses is the CEO of USA Rare Earth, Pini Althaus. “To counter the effort of the C.C.P. to put a chokehold on defense and other high-tech metals, the U.S. and its allies must continue to invest in this space,” he said in a statement.
The concerns rose to new heights when China’s Ministry of Industry and Information Technology recently proposed restrictions on exporting these strategic minerals and asked the public for comments. “The government wants to know if the U.S. may have trouble making F-35 fighter jets if China imposes an export ban,” according to one adviser.
Although the Chinese government’s language is subtle, the message is clear: It is exploring the possibility of weaponizing its dominance in the rare-earth-mineral market in a potential trade war with America. Its proposal is perceived as a warning shot.
Biden’s announced plans to phase out fossil fuels will make the United States even more heavily reliant on China.
Although decades of neglect have led to a precarious national security situation, capitalists may come to the rescue. By cosmic coincidence, rare-earth metals are rare only on Earth. In space, they are believed to be abundant. A single asteroid may contain more of these materials than all of Earth’s known reserves. Asteroid 2011 UW158 is estimated to have $5.7 trillion worth of these minerals.
In 2015, President Barack Obama signed the so-called Space Law that enables U.S. companies to appropriate and economically exploit objects in space. Together with President Donald Trump’s creation of the U.S. Space Force, these actions have set the stage for American dominance in this area.
The success of Elon Musk’s SpaceX has boosted the ambition levels and deadlines for exploration and development. With the progress seen in this field, asteroid mining may be a reality before 2030.
This timetable would not only undermine the severe threat that China poses but also set the stage for a new era of American expansion and progress.
Read more from Caroline Adana.