How Are Rare Earths Becoming a Geopolitical Flashpoint?

Rare earth elements have emerged as a critical point of leverage in the increasingly complex US-China relationship. These 17 elements, essential for manufacturing everything from military equipment to renewable energy technologies, have become powerful bargaining chips in international trade negotiations. China's dominant position in the global rare earths supply chain has created vulnerabilities that are now being addressed through aggressive policy proposals.

The strategic importance of these materials cannot be overstated. With China controlling approximately 85% of global processing capacity, Western nations face significant supply chain vulnerabilities that directly impact national security, technological innovation, and economic competitiveness.

The Strategic Importance of Rare Earth Elements

Rare earth elements serve as vital components in:

• Advanced military systems and defense technologies
• Electric vehicle motors and batteries
• Wind turbine generators
• Consumer electronics
• Medical imaging equipment
• Laser systems

These materials may seem obscure to the average person, but they form the backbone of modern technology. Their unique properties—including magnetic, luminescent, and electrochemical characteristics—make them irreplaceable in many high-tech applications. Despite their name, most rare earths aren't actually rare in terms of abundance in the Earth's crust, but economically viable concentrations are uncommon and processing is complex and environmentally challenging.

What New Policy Is Being Proposed?

A prominent US lawmaker has called for dramatic action to counter China's rare earth export restrictions. Representative John Moolenaar, who chairs a House committee on China, has urged the Trump administration to implement restrictive measures against Chinese airlines unless Beijing restores full access to rare earth materials and magnets.

The proposal represents a significant escalation in the ongoing US-China trade war impact. By linking airline access—a seemingly unrelated sector—to rare earth supply, policymakers are signaling a new approach to leveraging economic interdependence.

Key Elements of the Proposed Policy

• Restriction or complete suspension of Chinese airline landing rights in the United States
• Review of export control policies governing commercial aircraft sales to China
• Potential limitations on aircraft parts and maintenance services
• Targeted response to China's April 2025 decision to add rare earth elements to its export restriction list

This proposal would effectively create a conditional framework where China's access to the US aviation market would be directly tied to its willingness to supply critical materials to American manufacturers and defense contractors.

How Would Airline Restrictions Impact US-China Relations?

The proposed restrictions would significantly alter the current aviation relationship between the two economic powers. Currently, the aviation landscape between the US and China operates under strict regulatory frameworks that have been continuously adjusted since the COVID-19 pandemic.

Current State of US-China Aviation

• US Transportation Department recently extended approvals allowing United Airlines, American Airlines, and Delta Air Lines to operate 48 weekly flights to China
• This represents less than half of the 119 flights technically approved under existing agreements
• Chinese carriers operate an equivalent number of flights to the United States
• Flight demand between the countries remains persistently low in 2025
• Major US airlines have previously expressed concerns about "anti-competitive policies" by the Chinese government

The aviation sector has historically served as a barometer for broader bilateral relations, with flight frequencies expanding during periods of cooperation and contracting during tensions.

Potential Economic Consequences

Restricting Chinese airline access could have cascading effects across multiple sectors:

The economic impacts would extend far beyond the immediate aviation sector. Tourism flows would likely decrease, business relationships could become more difficult to maintain, and the psychological impact of restricted connectivity might spill over into other areas of cooperation.

Why Are Rare Earths So Critical to National Security?

The strategic importance of rare earth elements extends far beyond their commercial applications. Their critical role in defense critical materials makes them essential to national security interests.

Without reliable access to these materials, a nation's military capabilities and technological edge could be severely compromised. Modern warfare and security systems fundamentally depend on components that require rare earth elements for their functionality.

Defense Applications of Rare Earth Elements

• Precision-guided munitions and smart weapons
• Night vision systems and thermal imaging
• Radar and sonar systems
• Satellite communications
• Jet engine components
• Armored vehicle systems

Each of these applications relies on the unique properties of specific rare earth elements. For example, neodymium, praseodymium, and samarium are crucial for powerful permanent magnets used in guidance systems, while europium and terbium enable advanced display and optical technologies for targeting systems.

The Vulnerability of Defense Supply Chains

The Department of Defense has identified rare earth dependency as a significant vulnerability. China's willingness to use rare earths as leverage in trade disputes has accelerated efforts to develop alternative supply chains, but these initiatives remain years away from full implementation.

Military planners face a difficult balancing act—they must ensure access to critical minerals energy security while simultaneously developing alternatives and stockpiling reserves. This vulnerability extends beyond just the raw materials to include processing capabilities, as rebuilding the entire supply chain requires substantial investment and expertise.

How Has China Used Rare Earths as Leverage Before?

China has demonstrated its willingness to use rare earth exports as a geopolitical tool in previous disputes, establishing a pattern that concerns US policymakers.

The historical precedent for using rare earths as strategic leverage is well-established and informs current policy thinking. When examining China's past actions, a clear pattern emerges of using supply restrictions during periods of geopolitical tension.

Historical Precedents

• In 2010, China restricted rare earth exports to Japan during a territorial dispute over the Senkaku/Diaoyu Islands
• Export quotas were implemented between 2010-2015, severely limiting global access
• In April 2025, China added several rare earth items and magnets to its export restriction list in retaliation for US tariff increases
• These restrictions have triggered significant price volatility in global markets

The 2010 incident with Japan particularly alarmed Western policymakers, as it demonstrated how quickly supply restrictions could be implemented and the limited options available for countries caught unprepared. According to Reuters, market prices for some rare earth oxides increased by more than 500% during that period, causing significant disruption to manufacturing supply chains.

What Are the Broader Implications for Global Trade?

The rare earth dispute represents just one facet of the increasingly complex economic relationship between the US and China, with implications extending far beyond these specific elements.

This conflict highlights a fundamental shift in how nations view economic interdependence—increasingly through the lens of national security rather than mutual benefit. The concept of "strategic sectors" has expanded beyond traditional defense industries to include technology, resources, and infrastructure.

Escalating Trade Tensions

• The proposed airline restrictions come amid ongoing negotiations about potential Boeing aircraft purchases by China
• Reports suggest China is considering buying up to 500 Boeing airplanes as part of broader trade talks
• The aviation sector has become increasingly entangled with other trade issues
• These developments signal a growing willingness to use sectoral leverage across unrelated industries

The potential Boeing deal represents a significant economic opportunity that could be jeopardized by escalating tensions. With Boeing still recovering from previous challenges, access to the Chinese market remains critical for its long-term outlook.

Global Supply Chain Reconfiguration

The dispute is accelerating efforts to restructure global supply chains:

• Increased investment in rare earth mining outside China
• Development of processing facilities in the United States, Australia, and Europe
• Research into alternative materials that could reduce rare earth dependence
• Formation of strategic mineral alliances among Western nations

This reconfiguration represents a fundamental shift away from efficiency-maximizing global supply chains toward more resilient, security-focused regional networks. The costs will likely be higher, but policymakers increasingly view this as necessary insurance against supply disruptions.

How Might China Respond to Airline Restrictions?

China has multiple options for responding to potential US restrictions on its airlines, potentially escalating the situation further.

Given the interconnected nature of the global economy, China can leverage numerous pressure points beyond just rare earth supplies. The response would likely be calibrated to match the perceived severity of US actions while preserving China's broader economic interests.

Potential Retaliatory Measures

• Further restrictions on rare earth exports
• Cancellation of potential Boeing aircraft orders
• Limitations on US business operations within China
• Targeting of other US export sectors
• Reduction in cooperation on climate initiatives or North Korea

China's response would likely be calculated to maximize pressure on specific US industries or regions while minimizing self-harm. Past patterns suggest a preference for targeted, sector-specific responses rather than broad economic measures that could damage China's own growth trajectory.

What Are the Long-Term Solutions to Rare Earth Dependency?

While short-term policy measures may address immediate concerns, solving the rare earth dependency issue requires comprehensive long-term strategies.

The solution requires a multi-faceted approach spanning government policy, private investment, technological innovation, and international cooperation. No single measure will resolve the vulnerability, but a combination of approaches could significantly reduce dependency over time.

Strategic Approaches to Reducing Vulnerability

• Development of domestic mining operations in the United States
• Investment in processing and refining capabilities
• Research into recycling technologies to recover rare earths from electronic waste
• Material science research to develop alternatives or reduce required quantities
• International partnerships to diversify supply sources
• Strategic reserves to buffer against supply disruptions

Each of these approaches faces significant challenges. Developing domestic mining industry evolution requires overcoming environmental concerns and economic feasibility issues. Processing facilities must be built with substantial upfront investment before becoming economically viable. Recycling technologies remain technically challenging and often economically uncompetitive without policy support.

What Does This Mean for the Future of US-China Relations?

The US lawmaker restrict Chinese flights over rare earths access dispute highlights the increasingly complex and confrontational nature of US-China relations in 2025.

The relationship has fundamentally changed from one characterized primarily by economic complementarity to one increasingly defined by strategic competition. Both nations are reassessing their interdependence through security lenses, leading to more confrontational policies.

Evolving Relationship Dynamics

• Economic interdependence increasingly viewed through national security lens
• Growing willingness to use sectoral leverage across unrelated industries
• Reduced trust and cooperation even in previously stable areas
• Increasing domestic political pressure in both countries to demonstrate strength
• Complex balancing of competitive and cooperative elements in the relationship

This evolution suggests a future relationship characterized by strategic competition alongside necessary cooperation in areas of mutual interest. The challenge for policymakers will be managing this delicate balance while preventing escalation into more serious conflict.

FAQ: Understanding the Rare Earth Dispute

What exactly are rare earth elements?

Rare earth elements comprise a group of 17 metallic elements on the periodic table, including neodymium, dysprosium, and lanthanum. Despite their name, most are relatively abundant in the Earth's crust but rarely occur in concentrated, economically viable deposits.

Why does China dominate the rare earth market?

China's dominance stems from decades of strategic investment in mining and processing capabilities, combined with less stringent environmental regulations that made production more economical. The country recognized the strategic value of these elements earlier than Western nations.

Can the US develop its own rare earth supply chain?

Yes, but it requires significant investment and time. The US has rare earth deposits but lacks the processing infrastructure. Several projects are underway to develop domestic capabilities, but achieving self-sufficiency will take years.

How would airline restrictions affect ordinary travelers?

If implemented, restrictions would likely reduce flight options and potentially increase prices for travel between the US and China. Business travelers, students, and tourists would face greater difficulties arranging direct flights.

Are there alternatives to rare earth elements?

Scientists are researching alternatives for some applications, but rare earths possess unique properties that make them difficult to replace in many high-performance technologies. Complete substitution remains challenging in the near term.

Further Exploration

Readers interested in learning more about US-China trade relations and rare earth elements can also explore related educational content from Mining Weekly's coverage of global resource politics and trade disputes.

The intersection of resource security, trade policy, and geopolitical competition will likely remain a defining feature of international relations in the coming decades, with rare earth elements continuing to play a central role in this evolving landscape. Furthermore, the development of an European CRM facility represents one approach to addressing these challenges through international cooperation.

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