Why is Trump desperate for a trade deal with China? Know the SHOCKING reasons that brought US to its knees due to...

India.com

5 hours ago

(File)
China Rare Earth Elements: After assuming office for his second Presidential term in January this year, Donald Trump instigated a trade war with China by imposing exorbitant import tariffs on Chinese good. However, nearly six months later, the US President is desperately seeking a trade deal with Beijing to prevent key American industries from collapsing. Here's the reason why Trump made a U-turn on China, and is appeasing the Asian power to seek a China-US trade deal. Why US bent the knee to China?
China dominates the global supply of rare earth elements, which are used by the US defense industry to manufacture advanced weapons and defense systems like radar systems, fighter jet engines, etc. According to a report by the South China Morning Post, China controls more than 90 percent of the world's processing and refining of rare earth elements, and also leads in other refining an extraction of other critical minerals like refined gallium, of which it controls 98.8 percent of global production.
In recent years, Beijing has leveraged its dominance in critical mineral production and refining as a major negotiating point in trade wars, as well as targeting the defence industries of the US and its allies.
The US defense industry is majorly dependent on China for rare earth minerals, but the supply has been nearly halted due to the ongoing US-China tariff war. China has imposed an export ban on rare earth elements to the US, effectively weaking the Pentagon's Pentagon's military preparations and weapons manufacturing capabilities. How China pressured the US into submission?
In July 2023, Beijing imposed export controls requiring Chinese exporters to seek permission to ship eight gallium-related and six germanium-related products to other countries. In August last year, the list was expanded to include antimony, and in December, the Chinese Ministry of Commerce imposed export restrictions on gallium, germanium and antimony to the United States, as Beijing anticipated a trade war when Trump assumed office.
In April this year, Beijing imposed export restrictions, mandating special export licenses for seven categories of medium and heavy rare earth elements (REEs) – samarium, gadolinium, terbium, dysprosium, lutetium, scandium and yttrium – as well as magnets and other finished products containing these REEs to be shipped out of China.
China's sweeping restrictions on REEs brought defense manufacturing to a halt in US and its allied countries, as supplies of rare earth minerals required for weapons' manufacturing rapidly thinned out. Why US requires large quantities of REEs?
The United States is world's largest arms manufacturer and its defense sector requires a gargantuan amount of rare earth minerals to manufacture advanced modern weaponry such as precision-guided missiles, stealth fighter jets, naval warships, submarines and advanced radar systems.
According to various reports, the US-made F-35 stealth fighter incorporates over 400 kg (900 lbs) of REEs in each unit for its jet engines, avionics, munitions and radar systems. The F-47, US' Next-Generation Air Dominance (NGAD) fighter jet, is expected to contain even larger amounts of critical minerals, due to cutting-edge features like unmanned flight, artificial intelligence integration, and next-gen stealth capabilities.
Similarly, US navy warships and submarines require giant quantities of REEs, with Virginia-class submarines requiring 4,200 kilograms and Arleigh Burke-class destroyers needing 2,360 kilograms of REEs for their radars, munitions and other technologies.
US Predator drones, Tomahawk missiles, Joint Direct Attack Munition (JDAM) smart bombs, and advanced radar systems all rely on rare earth elements for propulsion, targeting, and guidance.
According to experts, more than 80 percent of the Pentagon's weapon system supply chains contain antimony, gallium, or germanium. Does US have REE resources?
While the US does have rare earth resources, those pale in comparison to China's gigantic hold on global refining and processing of REEs. The US accounts for around 15 percent of global production of REEs, but its not enough to meet the rare earth needs of US industries, especially the defense sector.
Since 2020, the Pentagon has invested $439 million to build domestic supply chains in critical minerals, and a $35 million contract was awarded to MP Materials in 2022 for a heavy rare earth processing facility. However, its supply chain is still miniscule compared to China, and thus needs to import a major chunk of REEs from Beijing.
In 2024, MP Materials announced a record production of 1,300 tons of neodymium-praseodymium (NdPr) oxide for producing neodymium magnets, while China produced an estimated 300,000 tons of NdFeB magnets in the same year. China's antimony dominance
Additionally, the US does not have any mining facilities for gallium, while China reportedly produced 750 of the 760 tons of primary low-purity gallium produced worldwide in 2024 and is known to have production capacity of up to 1,000 tons.
China also holds about 48 percent of the world's mined antimony, controls 98.8 percent of refined gallium production, and is responsible for 59.2 percent of refined germanium production. All these critical minerals are used in the manufacturing of advanced weapons, ranging from armor-piercing bullets, night vision goggles and cables, to nuclear weapons and naval warships.