Think Tank Ponders the Next China Mineral Export Move

Highlights

• China is leveraging its dominant position in critical mineral production to exert economic pressure on the United States.
• The U.S. remains highly vulnerable to supply disruptions due to China's control of critical mineral supply chains.
• The report recommends U.S. investment in domestic mineral production and international partnerships to de-risk supply chains.

The Silverado Policy Accelerator's (opens in a new tab) policy brief, "What’s Next on China’s Critical Mineral Hit List (opens in a new tab)?" (January 2025), discusses China’s increasing use of critical mineral export bans and controls as a response to U.S. trade measures. The paper argues that China is leveraging its dominant position in the production and processing of critical minerals—such as germanium, gallium, antimony, and rare earth elements (REE)—to exert pressure on the United States, especially considering recent trade tensions and export control measures imposed by the U.S. against Chinese tech sectors. China has escalated its restrictions, including imposing outright export bans on certain minerals and tightening controls on processing technologies, such as those essential for REE magnets, which are crucial for sectors like semiconductors and defense.

The brief highlights that the U.S. is highly dependent on China for these minerals, with China controlling most of the global supply chain. This has made the U.S. vulnerable to supply disruptions, especially as China continues to expand its export control regime, potentially impacting critical industries like semiconductors and defense.

The paper calls for the U.S. to bolster its domestic production and processing capabilities for critical minerals, to de-risk its supply chains, and to seek partnerships with other countries that can provide these vital resources.

However, the think tanks’ analysis has some limitations. While it correctly highlights China's strategic use of its mineral control, it overlooks some nuances in the global supply chain dynamics.

For example, it doesn't address how the global diversification of rare earth suppliers, such as from Australia and Africa, could mitigate the risks posed by China’s dominance. Additionally, the focus on retaliatory measures between the U.S. and China may simplify the broader geopolitical and market trends influencing global mineral markets, including the role of international institutions and alternative supply chains that may emerge over time.

The brief's strong U.S.-centric perspective may downplay the broader international cooperation or market forces that could reduce China's leverage in the future.