Both Germany and Japan have reported the first shutdowns. These shutdowns will become worse over time. While China is providing some licenses for Rare Earths, they’re slow walking them and customs approval, and I’ve been told (though cannot confirm) that so far they have given none to Indian companies. (Maybe that little Pakistan kerfuffle wasn’t cost free?)
This is all very amusing and instructive on a number of levels. America banned something that China could handle the bans on: semiconductors. China, after much provocation, banned something that there is simply no way of replacing in the next few years:
“There is no solution for the next three years except to come to an agreement with China,” said Andreas Kroll, managing director of Noble Elements, rare earths importer for medium-sized companies and startups without their own inventories.“China controls practically 99.8 percent of global production of heavy rare earths. Other countries can only produce these in minimal quantities, virtually on a laboratory scale.”
This is why Trump was begging for a call with Xi, and why he’s going hat in hand to China, rather than the other way around.
It’s not that there aren’t reserves elsewhere, though China does have the most:
Now what I find funny about this is that we’ve known about this vulnerability for ages. I remember writing about it back in the 00s. We did nothing. Nothing.
And it isn’t just about automobiles, a vast amount of weapons need rare earths, and the Chinese controls are ostensibly about “dual use” — aimed explicitly at military production.
The West has no foresight. No one did anything because China’s production is cheap, cheaper than any alternative would be. But anyone with sense would see that not having an alternative was allowing China to hold a gun to our heads, and would have subsidized production to make it cost competitive.
This summarizes so many of our problems: we know they exist, there’s a solution, but no one important can get rich off it, so nothing is done until it turns into a crisis, at which point much of the damage cannot be mitigated.
We have few real problems we can’t (or couldn’t, sometimes the deadline has passed) fix, and almost no real problems we’re willing to fix.
Dagnarus
” no one important can get rich off it”. I don’t buy this. Of course important people could have got rich off this.
I’m pretty certain important people get rich from rare earth’s in China. Important people certainly get rich producing artillery shells in Russia. Our societies are just senile.
Jan Wiklund
The stupid Westerners – “donkeys”, they are called in Asian media according to a friend of mine who listen to them – concocted the market dictatorship for their earlier colonies, but believed so much in it that they now are the only ones that obey it. It’s even written into the EU constitution.
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Not to worry. Trump has us covered. Right?
https://www.reuters.com/world/kyiv-is-ready-sign-resources-deal-with-us-ukraine-government-source-says-2025-04-30/
Poul
Just as you have pointed out that China will stop it’s dependence on US chips. So will the West stop their dependence on Chinese rare earths.
The prices will be higher and environmental pollution will rise too (the two reasons China has gained it’s key position), but rare earths are not that rare. It is just a question of costs. With national security involved China will be replaced, so any deal is just a short term solution then the US and EU will break the deals.
So another step towards no trade or strongly regulated trade between the US, EU and China. China’s mercantilist policies have reached their end.
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Obviously, or at least it should have been to any and all, my previous post about Trump’s Big Beautiful Rare Earths Deal with Ukraine was dripping, nay sizzling, with satirical sarcasm.
I’m amazed, really I’m not because these days nothing amazes me any longer, more establishmentarians don’t debunk this Ukrainian rare earths nonsense. As I said before in that post, Ian, Ukraine are liars but they’re not alone. Russia lies its ass off and so too does America and China is not immune either. It’s just a matter of degree and should be evaluated on a case by case basis and this Ukrainian rare earths deal is a whopper of a lie.
I thought it only fitting considering Trump’s Big Beautiful Boondoggle he calls a bill is so favorable to AI that we let AI answer whether or not Ukraine truly has rare earths. Hey DJT, since you’re such a fan of AI and support it whole-heartedly, for now at least, why not consult with it about rare earths in Ukraine versus taking Stephen Miller’s word for it or is Stephen Miller an AI too like Biden?
Here’s AI on Trump’s Big Beautiful Rare Earths Deal with Ukraine. As we all knew already without AI having to tell us, or we/you should have, it’s a crock. Ukraine knows it was a crock but did/does DJT or whether he does or doesn’t, does it matter either way?
Ian Welsh
Plenty of places can mine them, including the US and Canada. The issue is refining.
Mark Level
“The U.S. cannot do diplomacy”, and the Trump admin. cannot do diplomacy even more than the previous clowns– says Max Blumenthal on the most recent Grayzone report, “I think I’m a drone now.”
That’s a clever pun variation of an old Tommy James and the Shondells song. The episode is centered on his having visited a big AI Conference in the DC area after his recent trip to Iran. It had Palantir and a lot of the usual villains and Dr. Evils in attendance. He was expelled after asking a panelist about the current starvation in Gaza, using the “genocide” word. https://www.youtube.com/watch?v=L-xOO1lUv9g
But his specific comment was about the fact that Trump seems to now be bumbling into a full-on war against Iran, due to Zionist pressure from both parties, he has demanded that they have “0% nuclear enrichment” (a non-starter of course) and that the US be allowed to do “controlled demolition” of Nuclear facilities inside Iran!! Wackadoodle stuff.
Meantime he hasn’t yet let go of US collusion in trying to gin up WW III over Ukraine . . . How does this relate to the topic here? Well, if the entire NatSec blob is 99% clear that Ghina is the actual US peer-competitor that has to be destroyed ASAP (every few months they make major gains, the window of opportunity to attach China with any prospect of success is closing “soon”), and they still can’t remove supporting the genocide in Gaza (& the West Bank), “destroying Russia” (Brazil’s Lula recently shared that the senile Biden told him while still VP that this was his major ambition in life, other than jailing more black people, I guess) . . .
From my readings in history most Empires collapse via overreach against one peer opponent– the US has 2 peers, China economically stronger, and Russia militarily stronger, Iran a regional power that cannot be destroyed without destroying the US economy with $20 per gallon oil. Well, the writing is on the wall.
Trump is currently taking credit for the stand-down between Pakistan and India, which India has openly rebutted . . . the overgrown boy’s endless need to claim “Winning Bigly” means clinical insanity is probably a bigger concern than the malignant narcissism that the Libs for the most part correctly beat the drum about.
Watching the shit-show that is “International Relations” from the US it is difficult to predict the specifics of degeneration by the Empire, but at this point the trajectory is only downward, so the specifics may not matter. I’ve never been afraid to admit when I’ve gotten it wrong. I used to troll all my Lib friends by noting how stupid I was to have voted for Obama the first time thinking he would do anything different than a 3rd and 4th Bush term (but with nicer speeches, stylish empty words.)
So when people called me out some months back for sharing Keaton Weiss’s pre-election take: “You shouldn’t vote for either Kamala or Trump but if you think you must vote for one, it’s like a game of Russian Roulette and Trump is a gun with one empty chamber, Harris has bullets in all 6 chambers.”
Well, it’s true as far as it goes, but now I see it doesn’t go far enough. Yes, Kamala would’ve continued the genocide without a little pause to make the incoming President look non-genocidal before back to the status quo. She also likely would’ve fully committed to Regime Change in Russia and we could all be dead from large-scale Nuclear exchange by now.
However Trump’s complete bipolar incontinence and deep ignorance and arrogance do mean spectacular failure– will it be in Iran? In China? It’ll be somewhere, and likely before the mid-terms. The Empire is a train speeding off the cliff and there ain’t no PotOP (President of the One Percent) who will ever stop it.
Character is destiny, and the Empire’s character can’t be changed by anyone since the Dulles brothers et al publicly executed JFK in 1963. Chris Hedges has pitilessly noted the futility of “Hope”, and the Greeks had it right in the Pandora’s box story. Hope is the final poison pearl in the box of poison that “Western Civilization” brings. It should be abandoned fully and without reservation.
They’ll burn down their own empire based entirely on hubris and arrogance. It never could’ve ended otherwise.
Disaster Girl was only 4 years old, and she called it right– https://en.wikipedia.org/wiki/Disaster_Girl
bruce wilder
well, now the immediate issue is time.
to build the whole supply chain capability to source and refine rare earths (many quite different supply chains for the various rare earths really) and to become reasonably efficient — that begins to look like deep time when you think about building, say, university geology and chemical engineering programs.
the U.S. did not just “transfer” its industry to China. China set up the global dollar economy to incentivize U.S. disinvestment that mirrored the financial incentives to support China’s positive investment in manufacturing industry and also global supply chains. It cost China to do that — they had to make a lot of American business corporations very profitable as long as those companies were engaged in disinvestment: dismantling the cycles of reinvestment and renewal that keeps business and industry moving forward. that hollowing out of enterprise went right along with creating the oligarchy of the super-rich — it was the same process.
I had a conversation with a lady on the train yesterday — a French-Canadian business executive based in New York and she was lecturing me about how great Mark Carney was and how terrible Trump is. I, of course, could only agree that Trump is terrible. But, I raised an eyebrow about Carney, the Goldman-Sachs alum who parachuted in to save the Liberals — a Mario Draghi of the North. Carney was so well-qualified, so capable, knowledgeable . . . blah.
I said, yeah, but the U.S. had Barack Obama, who was greatly admired. And, yes, she said — Obama was great.
I said that I thought that Obama was evil and the U.S. would never recover from the consequences of his policies and I began a litany that would be familiar to readers of Ian’s blog: immunity for banksters, persecution of surveillance state whistleblowers, fracking to make the U.S. a major oil producer. I didn’t get very far in my long list before I was shouted down and she did not want to speak with me.
My point is that this is the mentality of a whole class of globalist apparatchiks — middle-level business executives and professionals, who simply no longer register history or consequences when it comes to the policies behind politics.
This is why it is Trump, in his semi-deranged way, who has been left to confront reality. Rare earths are simply a stark instance of the crisis of competence that has been building in the U.S. and the West for more than 25 years.
NR
This is just one of countless examples of how dependent the United States (and really, the entire world) is on China, and why this whole trade war with China is idiotic. The simple fact is that if China simply stopped all trade with the U.S., that would be the end of 90% of U.S. manufacturing for a decade. You’d be very hard pressed to find anything “made in the U.S.A.” that doesn’t use Chinese parts somewhere in its manufacturing process.
I don’t think most of our nation’s elite, including Trump, understand that fact.
GrimJim
The rich get richer, the powerful get more powerful, and the mid-level apparatchiks whose livelihoods depend on that are, of course, going to cheer on the policies that do this. Good, evil, right, wrong, sustainable or not, they will cheer on with every fiber of their being, because that is how they remain a mid-level apparatchik and do not fall into the “useless eaters” category.
Regarding rare earth minerals, you can find them just about anywhere, but to effectively mine them in an affordable manner will take the development of an entirely new industrial system, which requires technical know-how and massive industrial capital investment. The US does not have the former anymore, and the oligarchs are unwilling to do the latter, so it just won’t happen. The environmental impact won’t even come into it, as even the cost of strip mining and throwing the rubble into the nearest river West Virginia style will be prohibitive.
Every stupid thing Trump does with and to China brings us one step closer to a war that the US is not ready or capable of winning. And nuking China into submission is not a “win” by any definition, though that is what they will end of trying to do, as it will be the only thing left in their quiver when the battles are all otherwise done…
Mark Level
A little addendum to my comment above– listened to a bit of Larry Johnson and also John Mearsheimer before errands today, & both were hedging their bets as to whether Trump would bumble into a war with Iran, could go either way in their eyes. Johnson dropped a bombshell though regarding the unreleased files, stating that a source he couldn’t name had told him the JFK files will NEVER be released as they directly implicate Israel. The Izzys don’t have much support left during the mass starvation act (they’ve lost Piers Morgan, for god’s sake!) and maybe Kennedy was so long ago that modern ‘Muricans wouldn’t care (I concur with Gore Vidal’s opinion that JFK wasn’t much different than his peers). Anyway that is a far more consequential withheld file than the Epstein files in some respects, since those came up yesterday during the epic Elon-Donald Girl Fight.
And having referenced Kamala, I want to briefly restate I don’t think Musk can take the “credit” alone for Trump winning. She was a horrible, cackling sociopathic loon with only negative accomplishments and no charisma, and in the end something (even something mostly bad) will always beat nothing as regards the voting sheeple. Can any of us imagine a timeline on which Kamala became president? I certainly can’t, you’d have to be using the amount of ketamine (or a similar drug) that Elon does to imagine that outcome. In the past the plutocrats could put an utter non-entity like Warrren Harding in there, but with modern media people need to have magnetism. Kamala had only anti-magnetism.
Any political future she has is unimaginable. With the likes of Karine Jean-Pierre fleeing the Dimmies’ sinking ship, what is the point? Funny that Elon would think a 3rd party could be viable. But his instinct that the 2 major parties are dying seems pretty correct. They are the heart and lungs of the Empire, so it does make sense, however.
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One could argue and should argue that if environmental remediation costs associated with the mining and refining of rare earths is factored into the price, rare earths would remain rare in manufacturing. Instead, all the smart people decided to pretend the environmental costs don’t exist and proceeded to make rare earths increasingly ubiquitous in manufacturing. Here we are.
China should tell Trump if he wants a deal, he must pay the historical, present and future environmental costs. Just like he told Ukraine they need to pay the West back for all the military aid. I wonder how Trump would respond to such a demand?
https://e360.yale.edu/features/china-wrestles-with-the-toxic-aftermath-of-rare-earth-mining
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The dirty little secret that isn’t so secret is green is not so green unless you mean green backs.
One of the comments to the video ignores the environmental impact and instead points the finger back at Big Oil and claims that environmental degradation from oil lasts forever whereas with rare earths it’s one time because rare earths are recycled. Too funny. Rare earths could be recycled but my guess is they largely are not being recycled and will never be recycled to any extent or degree.
https://www.youtube.com/watch?v=bLFYChw5c0Y
Purple Library Guy
It’s funny. The US spends a ton of money and organizational energy doing international stuff for “national security”. The CIA along with USAID and the NED and the International Republican Institute and even some help from the freakin’ AFLCIO mess around overthrowing governments, blackmailing politicians and so on. The State Department team up with the military to put bases all over the damn place.
And yet, in a country that sees the economy as king, not only was nobody willing to put any thought into making sure that economy and its supply chains were not unduly dependent on the economies and actions of potential opponents, but any time someone else DID put thought into that, the reaction was “La la la, we’re not LISTENING!”
All because the likes of Lockheed Martin saw next quarter’s line go up faster if they outsourced.
@Dagnarus: You have a point to some extent, but the idea holds. I’d modify Mr. Welsh’s “no one important can get rich off it” to “no one important can get rich ENOUGH off it.” One feature of the modern financialized economy is that a ton of stuff that would be useful to do, and WOULD MAKE MONEY, doesn’t get done because the return isn’t high enough. If the investors can make 2% building the economy, but 5% stripping it by investing in private equity firms that cannibalize, or in firms that are mortgaging their own future borrowing money to do share buybacks, or in flat out fraud like crypto and other pure speculative plays, then the investment goes to stripping the economy rather than building it. Building up rare earth mines and refining would make some money slowly rather than lots of money right now, so the Western economy wasn’t doing it.
One key feature of the Chinese economy, I suppose, is that the people in charge of it see the economy as a means to an end that needs to be managed if it’s going to create that end. So they’re not shy about arranging things so that money and returns go to actual production of valuable things rather than to destructive speculation and looting. If the Communist Party of China saw some guy in China doing what private equity routinely does in the US, they’d find a way to outlaw it and put him in jail to make sure nobody else got any ideas.
Feral Finster
I am hardly a geologist, the only digging i do is when I bury turds, but I understand that “rare earths” are not actually all that rare.
Rather, the problem lies in processing, and, of course, such facilities cannot be built and switched on or off to synch with Trump’s whims.