U.S.’ inability to replace rare earths supply from China poses a threat to its defense, warns CSIS
Workers transporting soil containing rare earth elements for export at a port in Lianyungang, Jiangsu province, China, Oct. 31, 2010.
Stringer | Reuters
As China imposes export controls on rare earth elements, the U.S. would be unable to fill a potential shortfall, according to the Center for Strategic and International Studies — and this could threaten Washington’s military capabilities.
Amid U.S. President Donald Trump’s escalating tariffs on China, Beijing earlier this month imposed export restrictions on seven rare earth elements and magnets used in defense, energy and automotive technologies.
The new restrictions — which encompass the medium and heavy rare earth elements samarium, gadolinium, terbium, dysprosium, lutetium, scandium and yttrium — will require Chinese companies to secure special licenses to export the resources.
Though it remains to be seen exactly how China will implement this policy, the CSIS report, published Monday, warns that it will likely result in a pause in exports as Beijing establishes the licensing system, and cause disruptions in supply to some U.S. firms.
The New York Times reported earlier this week that a pause in China’s rare earth element exports was already occurring.
As China effectively holds a monopoly over the supply of global heavy rare earths processing, such restrictions pose a serious threat to the U.S., particularly its defense technology sector.
“The United States is particularly vulnerable for these supply chains,” CSIS warned, emphasizing that rare earths are crucial for a range of advanced defense technologies and are used in types of fighter jets, submarines, missiles, radar systems and drones.
Along with the export controls, Beijing has placed 16 U.S. entities — all but one in the defense and aerospace industries — on its export control list. Placement on the list prevents companies from receiving “dual-use goods,” including the aforementioned rare earth elements.
Not ready to fill gap
According to CSIS’s report, if China’s trade controls result in a complete shutdown of the medium and heavy rare earth element exports, the U.S. will be incapable of filling the gap.
“There is no heavy rare earths separation happening in the United States at present,” CSIS said, though it noted the development of these capabilities is underway.
For example, the Department of Defense set a goal to develop a complete rare earth element supply chain that can meet all U.S. defense needs by 2027 in its 2024 National Defense Industrial Strategy.
Since 2020, the DOD has committed over $439 million toward building domestic supply chains and heavy rare earths processing facilities, according to data collected by CSIS.
However, CSIS said that by the time these facilities are operational, their output will fall well short of China’s, with the U.S. still far from meeting the DOD’s goal of an independent rare earth element supply.
“Developing mining and processing capabilities requires a long-term effort, meaning the United States will be on the back foot for the foreseeable future,” it added.
U.S. President Trump has also been seeking a deal with Ukraine, which would give it access to its deposits of rare earth minerals. However, questions remain about the value and accessibility of such deposits.
Implications
The CSIS report warns that the export controls pose direct threats to U.S. military readiness, highlighting that the country is already lagging behind in its defense manufacturing.
“Even before the latest restrictions, the U.S. defense industrial base struggled with limited capacity and lacked the ability to scale up production to meet defense technology demands,” its authors said.
They cite an estimate that China is acquiring advanced weapons systems and equipment five to six times faster than the U.S., originating from a U.S. Air Force official in 2022.
“Further bans on critical minerals inputs will only widen the gap, enabling China to strengthen its military capabilities more quickly than the United States,” the report concludes.
The U.S. is not alone in its concerns about China’s monopoly on rare earths, with countries like Australia and Brazil also investing in strengthening domestic rare earth elements supply chains.
CSIS recommends that the U.S. provide financial and diplomatic support to ensure the success of these initiatives.
However, China’s new export licensing system for the rare earths could also incentivize countries across the world to cooperate with China to prevent disruptions to their own supply of the elements, CSIS said.
A research report from Neil Shearing, group chief economist at Capital Economics, on Monday also noted how controls on rare earths and critical minerals have become part of Beijing’s playbook in pushing back against Washington.
Shearing notes that in addition to China’s hold on some rare earths, the supply of many other critical minerals, including cobalt and palladium, is concentrated in countries that align with Beijing.
“The weaponising of this control over critical minerals — and the race by other countries to secure alternative supplies — will be a central feature of a fractured global economy,” he said.
Technology
Japan’s antitrust watchdog issues Google ‘cease and desist’ order over unfair trade practices
An attendee takes a photograph using a Google Pixel 9 smartphone during the CP+ trade show in Yokohama, Japan on February 27, 2025.
Tomohiro Ohsumi | Getty Images News | Getty Images
The Japan Fair Trade Commission (JFTC) on Tuesday issued a cease and desist order against Google for unfair trade practices regarding search services on Android devices— a move that aligns with similar crackdowns on firms in the UK and the U.S.
In a statement, the Commission said the American tech giant violated Japan’s anti-monopoly law by requiring Android device manufacturers to prioritize its own search apps and services through licensing agreements.
While Google develops the Android operating system, separate manufacturing companies like Samsung and Lenovo produce handheld Android products, such as smartphones and tablets. Thus, licensing agreements are necessary to grant these manufacturers permission to preinstall Google apps, including its Play Store, onto devices.
However, JFTC said Google also used licenses to require manufacturers to preinstall and prominently feature Google Search and Chrome on devices, with at least six such agreements in effect with Android makers as of December 2024.
The Commission added that the company required manufacturers to exclude rival search services as a condition of its advertising revenue-sharing model.
Under Japan’s anti-monopoly law, businesses are prohibited from carrying out trade on restrictive terms that unjustly impede transaction partners’ business activities.
JFTC first published the commencement of its probe into Google on October 23, 2023, and in April 2024, it approved a commitment plan from Google that addressed some of its anti-competitive concerns.
The cease and desist order demonstrates a harder stance taken by the Japanese government as well as its first such action against a U.S. tech giant.
The move also comes amid a trend of anti-competitive actions against Google globally. According to JFTC, it coordinated its probe with other overseas competition watchdogs that had experience investigating Google.
In a landmark case last year, a federal U.S. judge ruled that Google held an illegal monopoly in the search market, saying that its exclusive search arrangements on Android and Apple’s iPhone had helped to cement its dominance in the space.
Meanwhile, Britain’s competition watchdog opened an investigation into Google’s search services in January following the country’s implementation of new competition rules.
JFTC’s cease and desist orders that Google stop mandating that its own services be installed and featured prominently on smartphones.
Additionally, the company should relax its restrictive conditions for the distribution of advertising revenue, allowing manufacturers to choose from a variety of options.
Google has also been asked to appoint an independent third party that will report to the JFTC on its compliance with the cease and desist order over the next five years.
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