Lee Ha-kyung
The author is a senior columnist at the JoongAng Ilbo.
The United States has effectively declared a strategic battle for independence in rare earth minerals. Confronting China's dominance over more than 90 percent of the global refining market and its growing use of supply as geopolitical leverage, Washington has moved to counter Beijing, joined by 55 countries. The message from a ministerial meeting on critical minerals held at the State Department on Feb. 4 was clear: even if Chinese oversupply drives prices sharply lower, a price floor will be maintained so allied companies do not collapse.
The urgency reflects a painful lesson from last April. Chinese President Xi Jinping retaliated against President Donald Trump's 145 percent tariff increase by tightening export controls on rare earths. U.S. industries ranging from defense and semiconductors to automobiles and batteries were immediately affected. Trump ultimately backed down, agreeing with Xi to lower reciprocal tariffs to 115 percent and declaring a 90-day truce.
Known for his competitive instincts, Trump moved quickly to avoid a repeat. On Feb. 2, he personally announced "Project Vault," a $12 billion initiative to build strategic stockpiles of critical minerals. He remarked that he did not want to experience what happened a year earlier again. The Wall Street Journal noted that the U.S. strategy increasingly resembles China's state-led capitalism. In practice, the administration is providing financial support to private mining firms such as USA Rare Earth while taking equity stakes. The approach reflects Washington's determination, and anxiety, to narrow the gap with Beijing.
Until the 1980s, the United States was the world's leading producer of rare earths. The balance began to shift in the 1990s under the strategic vision of Deng Xiaoping. In 1992, Deng declared, "The Middle East has oil, and China has rare earths," elevating them from industrial inputs to national strategic assets. From that point, technological development in the sector became a state priority.
Even earlier, the Chinese government had tasked Xu Guangxian (1920–2015), a chemistry professor at Peking University, with advancing rare earth refining. Xu developed a solvent extraction method capable of separating all 17 rare earth elements at high purity, the world's first mass-scale refining technology. In the 1990s, China flooded global markets with low-priced, high-purity products. Competitors outside China collapsed one after another. Today, if Beijing were to shut off supply, key American industries would face immediate disruption. Rare earths have become a powerful strategic weapon.
Washington now acknowledges past misjudgments. At the ministerial meeting, Vice President JD Vance stressed that while advanced technologies and data centers are important, the economy still depends on physical resources, and nothing is more tangible than critical minerals. Secretary of State Marco Rubio admitted that the United States had become fascinated with new and glamorous sectors while outsourcing older industries that appeared outdated. Facilities such as the Mountain Pass mine and much of the domestic mineral base were allowed to decline, he said, only for the country to realize later that it had outsourced its economic security and future.
Despite the renewed push, prospects remain uncertain. The ecosystem of technology and skilled labor has eroded. Rebuilding refining facilities and stabilizing production yields will take five to seven years, far longer than the administration's goal of 18 to 24 months. Discovery Alert, an Australian mining analysis firm, warned that the U.S. strategy focuses too heavily on extraction while underestimating the refining technology gap. Energy law firm Baker Botts also noted that China retains the ability to drive emerging U.S. refiners out of business through predatory pricing.
The decline of the U.S. rare earth industry reflects earlier policy choices. Whil...
