Highlights

• China dominates 90% of rare earth magnet production, creating significant strategic vulnerabilities for US industries.
• US manufacturers face potential supply chain disruptions with potential impacts on automotive, defense, and semiconductor sectors.
• Rebuilding domestic rare earth processing and magnet production capabilities is crucial for national economic and technological security.

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David Sauer’s piece (opens in a new tab) in The National Interest hits on a central truth: China does dominate the rare earth industry, particularly processing and magnet production. Roughly 90% of rare earth magnets originate from Chinese facilities—a choke point for EVs, wind turbines, defense systems, and semiconductors. The reminder that Beijing embargoed rare earth exports to Japan in 2010 is historically accurate, and the risk of repeat action remains credible. Similarly, highlighting the U.S. Department of Defense’s partnership with MP Materials is factually grounded; this program is indeed aimed at rebuilding domestic capacity.

The claim that Ford Motor Company was “forced to temporarily close a factory in Chicago” in April 2025 due to rare earth magnet shortages merits review. While Rare Earth Exchanges (REEx) reported some impact—perhaps a slowdown—we cannot be certain it was an outright shutdown. We do not have independent verification confirming this case.  While U.S. manufacturers certainly face supply vulnerabilities, framing it as a direct consequence of a Chinese embargo may stretch the available evidence.

Huawei and the Rare Earths: A Convenient Coupling

Much of Sauer’s narrative fuses two different arenas: telecom security and rare earths. While Huawei’s market tactics and state backing are widely documented, tying this seamlessly into the rare earth supply chain risks may oversimplify a complex landscape. Rare earths underpin semiconductors and telecom equipment, yes—but Huawei’s dominance is more about standards-setting and cost structure than magnet supply, many would argue. The article risks blurring cause and effect to drive a harder geopolitical point.

The Rhetoric of Urgency

The author paints U.S. vulnerability in stark, almost existential tones: China as “the most significant national security threat” and rare earths as a weapon waiting to be unleashed. This framing is rooted in real strategic exposure—and the language alludes to a Cold War-style lens.   While biased in favor of America and the ex-China supply chain rebuilding, so is the team at REEx.

Why This Matters for Supply Chains

Although some sharp edges, Sauer’s piece reinforces a critical theme: the U.S. remains far behind China in rare earth refining, magnet production, and midstream capacity. Any trade war escalation could ripple through autos, defense, and clean energy. The takeaway for investors: keep an eye not just on mining projects, but also on whether Washington truly funds and scales the costly midstream steps that reduce dependence on Beijing. 

Citation: David Sauer, The National Interest, “America Must Cut Its Reliance on China—Now,” September 3, 2025.

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