By The Short And Curlies

Even a dumbass like me knew who held the cards.

That we got to such a point is totally insane. In my 2020 book Monopolized, I explained that the U.S. invented rare earth magnets for fighter jets in the 1970s. “A company called Magnequench manufactured these magnets in Indiana until 2004, when the plant closed and shipped out to China,” I wrote. “In fact, China bought the entire company, using as a front a hedge fund operated by Archibald Cox Jr., son of the famed Watergate prosecutor.”

It took decades to hollow out industrial production, hand over critical inputs to other countries to monopolize, and then base our economy on development that needs those critical inputs. No single president is responsible for creating this vulnerability; it was a team effort of short-sightedness. But it’s true, as Rush Doshi has said, that Trump bumbled into a trade war “without preparation, without allies, and without reducing our own vulnerabilities.”

Rare earths aren’t that rare; it’s the processing where China really excels. And we’ve had a decade-and-a-half of knowing that China was capable of wielding rare earths as a geopolitical weapon. The country briefly cut off Japan in 2010 after a skirmish involving disputed islands in the South China Sea. Nine years later, Xi Jinping pointedly toured a rare earth factory in the middle of Trump’s first trade jostling with China.

U.S. efforts to diversify the rare earth supply chain have been honestly pathetic. There have been a lot of developments of blueprints of plans, and more recently small funds for production. Trump’s Defense Department took a stake in MP Materials, which runs the biggest rare earth mine in America. But none of this represents the kind of serious resources and market commitments that are necessary.