The “Rare Earth War” is a strategic competition between the USA and China that focuses on access, control, and processing of these critical raw materials. Rare earths are essential for the production of high-tech products, military goods, and green energy, making the confrontation a central point in the global trade conflict.
Background and Impact
- Dependence of the USA on China: The USA is heavily dependent on China for rare earth imports. China controls over 60% of global production and nearly all processing of these raw materials.
- Trade Conflicts and Export Restrictions: In response to US tariffs, China has imposed export restrictions on rare earths, which could significantly impact the US defense and technology industries.
- Impacts on Industry: Companies like Lockheed Martin and Raytheon are highly reliant on these materials. Export restrictions could lead to increased production costs and delays in manufacturing advanced military equipment.
Affected Raw Materials and Applications
- Critical Elements: Scandium, Dysprosium, Samarium, Gadolinium, Terbium, Yttrium, and Lutetium are particularly important for aerospace, rocket technology, and military applications.
- Technology and Electric Vehicle Industries: Rare earths are crucial for producing smartphones, wind turbines, electric motors, and batteries for electric vehicles.
Strategic Measures
- Diversification of Supply Chains: The USA and Europe are investing in exploring new deposits, recycling technologies, and alternative supply chains to reduce their dependence on China.
- Political Tensions: Geopolitical tensions, including the Taiwan issue and tariff disputes, increase the risk of export stoppages and intensify competition for rare earths.
Conclusion
The “Rare Earth War” is a central aspect of the trade conflict between the USA and China, with far-reaching consequences for the global economy and technology industry. The USA’s dependence on Chinese imports and the strategic measures taken by both sides shape the current state of the conflict.