Trump Administration Moves to Secure Rare Earth Elements from Trade War

President Trump recently invoked a Korean War-era law to secure supplies of rare earth minerals that China has threatened to cut off in retribution for tariffs. The White House issued a series of Defense Production Act determinations classifying various technologies made from the group of 17 obscure elements as “essential to the national defense.”

China supplies 80% of the world’s rare earth minerals and processes all the ore produced at the only American rare earth mine — the Mountain Pass project in California. In May, Chinese President Xi Jinping visited a rare earth magnet factory, hinting it could be the next product affected by Trump’s simmering trade war.
“Without Presidential action under section 303 of the Act, United States industry cannot reasonably be expected to provide the production capability for Samarium Cobalt Rare Earth Permanent Magnets adequately and in a timely manner,” the White House wrote in one decision.

In addition to the heat-resistant magnets commonly found in advanced weapons systems, the list includes heavy and light rare earth elements, neodymium iron boron rare earth sintered material, and permanent magnets — common in hard disk drives.

Trump alerted Congress that the 1950 law, which the administration has reportedly considered to prevent coal-fired power plant retirements, provided the “most cost-effective, expedient, and practical” way to safeguard rare earth supplies.

“The Department of Defense will take actions to develop and purchase equipment and materials needed for creating, maintaining, protecting, and expanding production capability,” Trump wrote in each of a series of letters to House Financial Services Chairwoman Maxine Waters (D-Calif.) and Senate Banking, Housing and Urban Affairs Chairman Mike Crapo (R-Idaho).

According to a recent report by the Reuters news agency, the Pentagon has already asked the mining industry to detail plans for expanding domestic rare earths mining and processing. In Congress, Republicans have fought to boost domestic rare earth mining through “critical minerals” legislation that would ease regulatory and permitting requirements for certain elements deemed vital to national security.

Sen. Marco Rubio (R-Fla.), a member of the Senate Foreign Relations Committee, introduced S. 2093, the “RE-Coop 21st Century Manufacturing Act,” to allow private investors to form a rare earth cooperative, exempt from antitrust laws, that would be able to compete against Chinese state-run enterprises.

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