A bipartisan report reveals that the United States is not adequately equipped to combat foreign threats, particularly due to its over-reliance on China for critical mineral supplies. The report, titled "Decreasing Rare Earths Dependency," highlights the vulnerability of Five Eyes countries to China's dominance in the rare earth elements (REEs) market.
The report, "Decreasing Rare Earths Dependency: How the Five Eyes Alliance Can Minimize Rare Earth Trading Risk with China," was commissioned by the Henry Jackson Society. It points out that rare earth elements are essential for military equipment, and that Western military supply chains are precariously dependent on China's willingness to supply REEs.
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"The Five Eyes countries are dangerously exposed to China when it comes to rare earth minerals," said Helena Ivanov, the report's author. "They are all over-reliant on China for this critical resource."
China currently dominates the REE industry, controlling 60% of global production and almost 90% of processing. This dominance has provided China with significant leverage, which it has exercised for political purposes. For instance, in 2023, China contemplated limiting REE exports that are crucial for the manufacturing of F-35 fighter jets.
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The U.S. is heavily reliant on China for REEs, importing as much as 80% of its supplies. This dependence has made the U.S. vulnerable to Chinese coercion. The report warns that in the event of a conflict, China could cut off REE supplies to the U.S. within 90 days.
Admiral John Aquilino, the leader of the Indo-Pacific Command, has testified that China aims to be ready for an invasion of Taiwan by 2027. Given the tensions over Taiwan and China's willingness to exploit its market dominance, the overreliance on China for REEs is a serious concern.
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The report calls for the Five Eyes countries to collaborate to reduce their dependence on China. It suggests that countries like Canada, Australia, and the U.S. increase domestic REE production.
"In the last few years, China has become a bad faith actor," the report says. "There are substantial issues and risks involved with relying on China for REEs."
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The report highlights the importance of risk reduction, arguing that Western countries cannot afford to repeat Europe's past reliance on Russian gas. It emphasizes the need for collaboration and coordination within the Five Eyes Alliance to mitigate the threat posed by China's dominance in the REE market.
