Highlights
- Risks to tech supply chains from potential tariffs, sanctions, and China’s control of rare earth minerals
- Strategies proposed to mitigate supply chain vulnerabilities and enhance national security:
- Friend-shoring
- Nearshoring
- Potential biases include:
- U.S.-centric perspective
- Oversimplification of complex geopolitical and economic trade dynamics
Business writer Monica Melton (opens in a new tab) recent piece in Business Insider (opens in a new tab) on rare earth elements, China and potential trade wars with incoming POTUS Donald Trump presents a mix of factual reporting and commentary, with several implicit assumptions and potential biases. Rare Earth Exchanges provides a breakdown for investors and others interested in this topic.
The article discusses the risks to tech supply chains posed by tariffs, sanctions, and China’s dominance in rare earth minerals, which are critical for manufacturing advanced AI chips and other technologies. It emphasizes strategies like friend-shoring (relocating supply chains to allied countries) and nearshoring (bringing supply chains closer to home) as ways to mitigate these risks. The piece highlights the work of SolidIntel (opens in a new tab), a supply chain advisory firm, in helping companies identify vulnerabilities and build more resilient, diversified supply chains. While these changes involve short-term challenges, they are portrayed as vital for enhancing U.S. national security and economic stability. So, in this way, the piece represents a sort of biased view, hence our critical look.
On Solidintel, founded by Dr. Megan Reiss, a former national security advisor to Utah Senator Mitt Romney, apparently has been very busy since the election. The D.C.-based supply chain advisory firm has been fielding calls from current and prospective clients seeking to capitalize on potential changes under the incoming Trump and his second term.
SolidIntel’s clients also want to know how to de-risk their operations as talk of tariffs sends markets into a volatile turn. Key, of course, is offering clients and investors truly objective, comprehensive, multifaceted advice, ensuring all risks are delineated.
What are potential biases in this article?
First and not surprising, this article is from a pro-U.S. national security framing. Rare Earth Exchanges is based in Salt Lake City, Utah, and tends to bring a U.S.-centric bias to our reviews, analyses, and the like. But we will try to be as objective as possible, critically important, actually for investors, business executives, government officials, and the like.
The article leans heavily on national security as a rationale for moving supply chains away from China. While this is a valid concern, the framing implicitly prioritizes U.S. geopolitical interests without fully exploring the broader economic, environmental, or social implications of such shifts.
It should also be pointed out that the article consistently portrays China as a risk or adversary, framing its dominance in rare earth minerals as a liability rather than a feature of the global supply chain. It does not discuss the potential benefits of continued trade and cooperation with China, such as cost efficiency or shared technological advancements.
On the other hand, the national security implications of the current highly uneven situation do raise considerable risk for Americans and others in the West. Nearly universally pro when it comes to friend-shoring and nearshoring, less any negative downside, such as increased costs, slower implementation, opportunity costs, or, of course, environmental degradation in new mining areas associated with the refinement process.
The Business Insider writer avoids most any counterpoints. For example, the article doesn’t provide alternative perspectives, such as arguments against moving supply chains or viewpoints from other stakeholders like Chinese officials, global economists, or environmental advocates.
What kind of assumptions are Business Insider making?
First and foremost, Ms. Melton assumes that tariffs are a major concern for businesses and will drive significant action. While tariffs are influential, the piece does not weigh other possible considerations, such as technological collaboration or existing long-term contracts. The writer could be fully correct, but not necessarily.
Is China that monolithic threat touted by much media in America?
The article assumes China will leverage its dominance in rare earth minerals as a weapon against the U.S. This overlooks the mutual dependency in global trade and the possibility that China may have incentives to maintain stable trade relationships. China loses big-time markets if it crosses too many commercial lines.
Melton also assumes a rapid transition and feasibility linked to moving supply chains or developing alternative sources of rare earth minerals. Often, when selling a product or service, the salesperson appeals to feature or greed. Moving supply chains must happen now; it’s urgent and imminently possible. But does it acknowledge the long timelines involved (e.g., a decade to bring a mine online). It doesn’t delve into the real challenges businesses might face, such as environmental regulations, capital investment, or labor shortages.
Important technology we believe at Rare Earth Exchanges will be an instrumental force in disrupting current rare earth element supply chains. But as opposed to revolutionary, it will likely take on an incremental impact over time.
The reliance on technology like generative AI and machine learning to address supply chain risks is assumed to be a robust solution. However, this overlooks the limitations of data accuracy, human oversight, and geopolitical complexities.
Also, technology is necessary for processing. Remember China controls about 80% of processing, no trivial matter. Whose fault is that? U.S. politicians and corporate chieftains that benefited from the enormous trade benefits over the last few decades.
Rare Earth Exchanges Two Cents
The article leans toward a U.S.-centric, pro-national-security perspective, viewing China’s role in global supply chains through a predominantly adversarial lens. It assumes that derisking supply chains is an immediate and necessary priority, emphasizing strategies like friend-shoring without exploring their economic, environmental, or logistical challenges in depth. Or opportunity costs for that matter. While we too at Rare Earth Exchanges bring some of the same biases (we are a Utah-based venture, fiercely patriotic, etc.), and align with certain political and economic priorities, as analysts and journalists it’s important to bring as balanced an analysis of counterarguments or broader global considerations as possible.
Daniel
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