China’s near-monopoly over the materials that make modern life possible is no accident; it is the result of 40 years of industrial statecraft. Beijing now accounts for roughly 60% of global rare-earth mine output and close to 90% of downstream separation capacity, the high-margin step that turns dusty ore into indispensable inputs for magnets, lasers and guidance systems. It is not hyperbolic to say that whoever controls rare earths, and—more importantly—their refining, separation, and downstream value chains, stands to shape the fate of entire industrial sectors.
How Beijing did it. Low environmental standards, targeted subsidies and patient capital let Chinese producers undercut Western rivals throughout the 1990s and 2000s. When US miner Molycorp filed for bankruptcy in 2015, the field was effectively cleared. As it turned out, you can abandon mining, but you still need the raw materials. This misguided policy allowed China to expand - at great environmental cost - and create raw material chokepoints it now uses as leverage.
The numbers today. The U.S. Geological Survey estimates 45.000 tons of rare-earth-oxide (REO) concentrates were mined in the United States last year. This is equivalent to barely one-eighth of Chinese output, and only 1.300 tons were processed into separated compounds domestically . Europe remains worse off and is betting on new experimental processes like Solvay’s new pilot separator in La Rochelle which are only producing tiny amounts far below the needed quantities.
Leverage in action. In October 2024 Beijing added antimony, gallium and germanium to its export-licence list and demanded end-use disclosure for most rare-earth shipments, a move that effectively weaponises traceability rules against Western manufacturers.
Who moves next?
– Washington’s Inflation Reduction Act 2.0 channels another USD 4 billion into Mountain Pass, California, but commissioning of a full separation line is pencilled in for late 2027. This could turn out to be an eternity in strategic terms.
– The EU’s Critical Raw Materials Act forces member states to “de-risk” supply chains by 2030, yet Brussels still lacks a unified permitting framework which leaves individual capitals to haggle over who does what in a rare earths processing supply chain.
The takeaway: China’s control is no longer just about mining; it is about chemistry and process engineering. Until Western firms master those mid-stream steps, talk of “decoupling” will remain largely aspirational.
The Trump Doctrine 2.0 – Tariffs, Missiles and Transactional Alliances
President Trump’s July pivot marks the most explicit fusion of foreign-policy leverage and economic mercantilism since the 1970s when Richard Nixon remade the global economic system. “America First” is a policy that weighs economic and geopolitical interests, and where the latter is limited, attempts will be made to cash in on the needs of other parties:
Weapons pipeline. European allies will purchase roughly USD 10 billion in US arms, including Patriot batteries, GMLRS (Guided Multiple Launch Rocket System) rockets and potential long-range ATACMS (Army Tactical Missile System) before transferring them to Kyiv . Trump bills it as pro-business burden-sharing: Europe foots the bill, US factories book the revenue, Russia feels the pain.
50-day ultimatum. Moscow has until early-September to accept a ceasefire or face secondary tariffs on energy exports. This would mean that crude buyers from India to Turkey would be hit with duties exceeding 100%.
Strategic ambiguity. While the Oval Office floated the option of long-range missiles, the president immediately downplayed the idea, thereby keeping both escalation control and bargaining chips intact.
"We're going to be doing secondary tariffs [on Russia] if we don't have a deal in 50 days. It's very simple. It'll be at 100%," Trump said.
Allied reaction is uneven. Berlin fears tariff spill-overs on refiners, Rome frets about migration from the Maghreb, and Tokyo quietly applauds anything that strains Sino-Russian logistics. Yet the common thread is clear: geoeconomics is now the first instrument of coercion, not the last.
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