In this episode of the Rare Earth Exchanges podcast, hosts Dustin Olsen and Daniel O’Connor discuss the recent announcement of sweeping tariffs by President Trump, termed ‘Liberation Day for American industry.’ They explore the implications of these tariffs on global trade, particularly focusing on critical minerals and rare earth elements. The conversation delves into the geopolitical risks associated with these policies, the potential responses from other countries, especially China, and the future of the rare earth market. The hosts emphasize the need for a strategic approach to supply chain resilience and the importance of industrial policy in competing with state-owned enterprises in China. They conclude with thoughts on the opportunities that may arise from these changes and the importance of being prepared for the evolving landscape.
Chapters
00:00 Introduction to Current Events
02:51 Trump’s Tariff Announcement and Its Implications
06:10 Impact on Critical Minerals and Rare Earth Elements
08:56 Geopolitical Risks and Supply Chain Resilience
12:10 China’s Response and Market Dynamics
15:03 Future of Rare Earth Exchanges
17:59 Conclusion and Final Thoughts
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(opens in a new tab)Transcript
Dustin Olsen (00:01.432)
Hi everyone, welcome back to the Rare Earth Exchanges podcast. You’ve got me and you’ve got Daniel and we’ve got some crazy news going on. fact, Daniel told me before the call, he’s like, news is old, man. things are going on so fast around here. He’s like, we can’t talk about what happened last week because it’s too old. So Daniel, is on the radar right now?
Daniel O’Connor (00:20.644)
Daniel O’Connor (00:25.196)
Well, I think it’s, as you know, Dustin, it has been liberation day. And yesterday our president, Donald Trump, made some announcements and what he’s doing is shaking up the whole world. mean, the other day, yesterday in the Rose Garden, a speech frankly steeped in populist fury and fiery rhetoric.
President Trump unveiled a sweeping new tariff regime, basically declaring this a national economic emergency and launching what, again, we would call Liberation Day for American industry. There’s a baseline 10 % tariff that applies to all imports rising steeply for countries where, at least according to the logic of the White House, it’s deemed unfair trade partners.
25 % for foreign cars, 34 % for China, although minerals aren’t necessarily included, which is interesting. We’ll get to that. 20 % for EU, and as high as 50 % for Lafayette, the African country, and Vietnam has very high tariff rates. So Trump used the words plundered and pillaged, lambasting US allies and rivals alike.
Dustin Olsen (01:49.326)
you
Daniel O’Connor (01:53.762)
Okay. Accusing them of decades long exploitation of America’s industrial base. And I think there’s some truth to that, Dustin. I really do. I don’t agree with everything President Trump is doing, but I agree with some of it. You know, will Trump, however, one of the things, Dustin, that’s important to all of this is how is the world going to react? If the world gets afraid, my goodness, this is the American market. We’ve got to work with President Trump.
Dustin Olsen (02:02.636)
Mm-hmm.
Daniel O’Connor (02:22.968)
That sort of falls into President Trump’s scheme. However, if the world comes together, if Europe comes together like the Germans are suggesting they do, if maybe Chinese work with BRICS to come together as a bloc, then we have to ask, will President Trump buckle under the pressure of a coordinated European response or Asian BRIC response?
So, you know, I want to talk a little bit to our audience here about the real reason for this radical upheaval in global trade, right? And how does that impact the critical minerals, the rare earth element market? That’s a very important topic. Stock markets have just gone haywire. I haven’t checked what they’ve done in the past hour. Yeah, I probably won’t. Luckily, I’m a conservative guy. I mostly invest in bonds, to be honest with you. I risk my labor.
Dustin Olsen (03:10.222)
Don’t check, don’t look.
Daniel O’Connor (03:20.76)
Dustin, I risk my labor, but the money I try to keep it in somewhat conservative places. you know, for tariffs and critical minerals, and again, critical mineral is different than rare earth elements, but we’ll just kind of throw it together under a category for sake of simplicity, okay? These
So first of all, what he’s trying to do, Dustin, is reshape the entire sort of liberal post-World War II liberal globalized order. There’s all kinds of trade agreements and understandings around security. And really the premise was the US is the superpower. It’s got the money. It’s going to support a lot of different countries. And it’s going to help.
empower other countries. We really helped China grow. Nixon went over there in the early 70s, got a deal. The rest is history. We outsourced lots of stuff to the Chinese and now they’re super rich. They’re just about caught up with us, not too far away. Trump is in a way betting the farm on the US farm, on doing things differently. We’ll see what happens.
he has provided some, this is very important, he’s provided some exemptions for critical minerals signaling, we think, a strategic approach to supply chain resilience. He’s not just using the tariffs in that area, okay? you know, challenges that are gonna come potentially from these tariffs include increased capex and sourcing uncertainties from mining and refining equipment imported from abroad, and I’ll get into that.
And finally, geopolitical risks exist if diplomatic engagement doesn’t accompany terror policies, potentially pushing mineral rich countries closer to China. So in other words, the Trump tariffs, if we don’t quickly get on top of this and negotiate deals, they can start cozying up closer to China. An example would be Brazil. so let me just get into this a little bit.
Daniel O’Connor (05:40.462)
The newly unveiled terror program is certainly rattling global markets, but it’s sending a more targeted message in the rare earth and critical mineral space. While sweeping new duties, you know, again, 10 % all the way up to 50%, for unfair trade partners threatened to disrupt wide swaths of global trade, Dustin, the Trump administration made one thing clear.
from all of this. Energy and certain minerals not available in the United States will be exempt from reciprocal tariffs. I want to say that again. I want you to then tell me what you think that means. Okay, so.
Energy and certain minerals not available in the United States will be exempt from reciprocal tariffs. So how do you interpret that Dustin?
Dustin Olsen (06:40.366)
well, kind like we were saying last week, you know, don’t want to bite the hand that’s feeding you, right? If we need those things because geologically, physically, whatever, we can’t provide for ourselves in those areas, why would you make it harder or more expensive to get?
Daniel O’Connor (07:00.088)
Yeah, yeah. And you need the flexibility to be able to get these products so that you can work on your resilience plan, right? So, and there’s a couple of smart consultants out there that have already spoken about this. And again, what Rare Earth Exchanges is all about is we’re distributing this information, we’re democratizing it. We’re working on exciting stuff that we can talk about a little bit towards the end.
Dustin Olsen (07:10.136)
Mm-hmm.
Daniel O’Connor (07:27.032)
Now this carve out that I just shared with you and that you got isn’t just technical. It signals a broader strategy that views mineral security not through the lens of protectionism, but through the urgency of supply chain resilience and strategic leverage. So it’s an implicit message for critical mineral, sorry, critical inputs like rare earths, cobalt, lithium, graphite.
The U.S. must still cooperate with the world, even as it retreats from broader trade liberal liberalization. think about that. So what I’m saying, Dustin, is that, you know, it’s interesting, right? Trump is basically targeting a whole bunch of industries and countries with all these tariffs, which are going to disrupt things. But when it comes to certain critical minerals,
rare earths or energy there may be some exceptions. Okay. Now, but here’s the issue. Okay. And there’s one consultant out there. Her name is really smart woman, Grace Baskaran. She works for CSIS and she talked about this, but we have some critique on that. Her point was, Hey, it’s a great opportunity. You know, we’re not just throwing in the towel with rare earths, critical minerals.
there’s a strategy, there’s a plan. But exemptions don’t isolate the sector from collateral damage. And this is our point today. So steel aluminum might remain under existing Section 232 tariffs. Copper could re-enter national security review territory. However, equipment, reagents, and precision parts used to build out U.S. mining and refining capacity. So the equipment…
that you use for mines or for processing and remember we need to build up our processing. Much of that is still imported.
Daniel O’Connor (09:36.14)
and they’re subject to the very tariffs intended to spur domestic growth.
Daniel O’Connor (09:43.918)
So that means increased capex, longer timelines, and uncertainty around sourcing. All of which could slow down the build out of America’s critical mineral infrastructure. So do you see where I’m going with this, Dustin?
Dustin Olsen (10:01.716)
yeah. Yeah, it’s,
honestly cause for concern and I hope someone’s advisor has thought through all these details. You know, I think just the logic response here is, you know, here at Earth Exchanges, we’ve said that over and over, China controls 90 % of all processing of these rare earths and critical minerals, right? And if China is getting a 54 % tariff,
Daniel O’Connor (10:15.289)
We
Daniel O’Connor (10:31.108)
Thanks.
Dustin Olsen (10:37.428)
on all of that. Like, why? We don’t even have the infrastructure to compete with that.
Daniel O’Connor (10:45.186)
So, and remember, so the policy has been the minerals and maybe some energy gets a free or the elements, the rare earth elements, which are different than the critical minerals may get a free pass. However, some of the equipment that you need to develop mines or to build facilities for processing, they may fall under those tariffs. And China is like 30,
was it 34 % something like that. Anyway, the point is that’s not industrial policy. That could hurt us. So what they should be thinking is, well, if we’re gonna do this tariff thing, let’s not do tariffs on things that we need to rapidly build our infrastructure. Look, we’re just a small startup. We don’t have a huge following yet, although the traffic is growing rapidly.
on our website. So our reach is still limited. But at some point, I think some important people already come to this show and to our website. I know that. I see who is signing up on our newsletter. So now, just to finish this, there’s another point I want to make. Beyond the borders,
Dustin Olsen (11:45.385)
it is.
Daniel O’Connor (12:10.382)
There’s a geographical fallout that could loom large from all of this. Dustin. Countries from Indonesia to South Africa to India, rich in mineral wealth and already producing their own brand of resource nationalism, may be pushed further into China’s orbit. If the US fails to pair tariffs with a robust strategy,
for diplomatic engagement and trade alignment. you know, terrorists may be the headline, but without mineral diplomacy to match, we, the United States, could end up strengthening the very dependencies we seek to escape.
And then we cannot say, I mean, we cannot forget what we’re constantly writing about Dustin, that industrial policy in the area of critical minerals and rare earth elements, excuse me, industrial policy is really necessary in this case. You are competing against the Chinese government, the treasury there, has, you know, trillions of dollars and these large publicly traded, but state owned.
actors that consolidate the rare earth mining, refining and production. And we can’t compete with that just on an open market playing field. cannot. So tariffs can help, but we’re missing a few things and we’re hoping that somebody out there important that has President Trump’s ear is reading or listening to rare earth exchanges.com.
Dustin Olsen (13:55.458)
Fingers crossed and based on a lot of the reports I was reading, short-term pain for long-term gain is kind of the ulterior messaging there.
Daniel O’Connor (14:10.776)
Well, I will just tell you this. Yes, short-term pain for long-term gain. Here’s the problem though. If that short-term pain turns into intermediate pain…
Daniel O’Connor (14:24.824)
you’re gonna have a political crisis on your hands. because if you’re betting the farm, I think people that voted for President Trump voted for two major things. One, lower the prices, have a little bit better economy. Yeah, get some more energy flowing and tighten up illegal immigration. Those are the two main things, okay? Blowing up the entire trade.
Dustin Olsen (14:31.662)
yeah.
Daniel O’Connor (14:53.508)
Now maybe on his mind he always thought that’s what we had to do. However, he didn’t say that on the campaign trail.
Dustin Olsen (15:03.678)
Nope, he certainly did not. think people would have, you’re gonna do what? What does that mean?
Daniel O’Connor (15:04.686)
Heh heh.
Daniel O’Connor (15:10.723)
Yeah, exactly.
So hey, it’s a ride, it’s a journey. We’re patriotic Americans. We’ve got to support the president, but we also have to be critically thinking and try to inject into the conversation some critical thinking along the way. Now want to talk about one other thing, Dustin, that’s very important.
Dustin Olsen (15:35.918)
Get on, what do you got?
Daniel O’Connor (15:37.22)
Alright, so Baogang, which is Baogang Group, Baotao, Rare Earth Product Exchange. This is a marketplace in Mongolia. It’s the biggest exchange marketplace of rare earth elements in the world, but it’s all China. Okay. They are, they are reporting, and this is a source, this came from Rare Earth Exchanges first. Out of China and us in
the English speaking world and in Europe everywhere. We’re the first news to source this. We report that China’s Baotow Group, Rare Earth Products Exchange or the Rare Earth Exchange posted a strong first quarter performance, but more importantly, they’re talking about expanding. They’re talking about expanding.
new niche products and raw material auctions. That includes considering… Well, in parallel, this Chinese exchange, one of the couple big ones in China, signed a cooperative agreement with the Baotow Rare Earth Research Institute.
establishing a dedicated promotional space on the exchange’s website and creating a marketing channel for scientific and industrial collaborations. First for China and potentially the world, a spot price index.
for rare earths in China, but also for the West. They said we might want to take this globally, outside of China, ex-China. That’s a big deal. And I have to say, Dustin, all this is happening since we wrote all these articles. And I just wonder if we’re having some influence. I’ve seen a lot of folks out of China come into our website and on our LinkedIn group. They’re definitely reading us.
Dustin Olsen (17:41.262)
Thanks.
Yeah.
Daniel O’Connor (17:49.432)
Are they trying to copy us, Dustin, with our idea? We’re going to have to to get in touch with President Trump and get some help here.
Dustin Olsen (17:53.993)
All right.
Right? Yeah, it’s, it really makes you wonder like who’s, who’s really coming, who’s really reading and when are they going to give us the credit that’s due?
Daniel O’Connor (18:10.712)
Yeah, well, or they’re, you know, unfortunately we’re tipping the Chinese off and, know, they’re going to just go, while we try to build our exchange, they beat us to the punch. But we can say we’re American. Okay. So you’ve got to go American first.
Dustin Olsen (18:19.651)
Yeah.
Dustin Olsen (18:24.962)
Yep, gotta go American first. And every market loves competition. Every market thrives in competition, so.
Daniel O’Connor (18:31.268)
Absolutely. So on that note, I just wanted to get that out there. This is sourced in China. We’re the first to report on it that I have seen and you know, it ties into, I just want to conclude from my perspective, we are building out the project directory. So if you go to rareearthexchanges.com, you will see our projects and that’s pretty much every
rare earth mine out there. Not all of them have rare earth. So what we do is we have part of our team doing research into all of these mines and mining projects around the world. And we’re going to update that in a slicker interface, more user friendly interface, more dynamic. And then we’re going to do some other very interesting things for market pricing, supply and demand.
So we’re working on some very exciting disruptive things. can’t go into all of it, but it’s quite exciting.
Dustin Olsen (19:27.17)
Yeah, we don’t want anyone to rip us off. Yeah, so keep a tight lid on it, Daniel. Yeah, some exciting things for sure. And we try to encourage everyone to come to whereearthexchanges.com to see the latest news that we’re reporting on, even if it is just a different take on the same things you might be hearing elsewhere.
Daniel O’Connor (19:29.068)
No. Thank you, Justin. Thank you.
Yes.
Dustin Olsen (19:55.374)
Because we do definitely try to break it down, look at it pragmatically, logically, what are the loopholes that are going on. So definitely worth the discussion. And leave comments, too, on our articles, things that you see, your thoughts. Yeah, let us know what you think. What’s truly going on in the industry?
I think as a community, we can only make it better from here. join in. So yeah, Daniel, was that, so I kind of summarized the hot news, the latest goss.
Daniel O’Connor (20:35.714)
Yes, I think for, you know, there’s a bunch of other reports that we’ve done, but considering the intense, you know, globe shaking policies that President Trump has just enacted, the terror policies, I think it was appropriate that we focus on that today.
Dustin Olsen (20:58.766)
100%. I mean, how could we not? It affects more than just the United States. It affects the world. Everyone’s reacting. Everyone has apprehension of what that looks like. And I truly do hope it’ll be some short-term pain, because heaven knows I don’t want to go through any more than I have to.
Daniel O’Connor (21:29.264)
Yeah, I concur Dustin. We want to mitigate or avoid pain and if we’re going to have pain, let’s keep it short term.
Dustin Olsen (21:41.868)
Yeah, I, if, it can’t be that, then I, then I’m really just start to question some decisions that have been made. cause I can appreciate the need for, being independent and self-reliant. Like I appreciate all that. And if this will get us there, I’m all for it, but at what cost? So.
Daniel O’Connor (22:11.48)
At what cost and again, you know, if you look at Adam Smith, wealth of nations, the discipline of economics, it’s all about trade. It’s all about, you know, division of labor and, you know, specialize in what you’re good at. And, and so, you know, I think let’s give it a chance. You know, we got to give president Trump a chance. You know, he, he was elected, you know, he, he’s got some smart people around him.
Let’s be cautiously optimistic.
Dustin Olsen (22:44.962)
great way to say that. Cautiously optimistic. And, and honestly, it’s, you know, kind of do unto others as you would have them do unto you. And for me, I would appreciate the benefit of the doubt. would appreciate, you know, just an ounce of trust if I couldn’t give all the details, you know, so I’m just like, if it were me, if I was in his shoes trying to do the country a favor.
You know, I think I would like it if people would just give me a chance. so I think you’re spot on with that, Daniel, of let’s be cautious. Let’s give him benefit of the doubt. Until he proves otherwise.
Daniel O’Connor (23:27.385)
Yeah.
Daniel O’Connor (23:31.256)
Well, think we can, you know, just on that note while we’re on this topic, the way we’ve been going about it is not working because, you know, we’re sort of getting more and more debt and more and more trade and balances.
We have ourselves to blame for that, by the way. I mean, you know, I don’t blame China for wanting to do well. I don’t blame anybody. But again, our politicians, our government officials, our corporate chieftains, you know, they’ve had an environment where they can do well for themselves based on short-term gain, but long-term pain. So now Trump is forcing us to, you know, reckon with
the reality of where we are. And it’s not pretty. And you can kind of pretend like, well, it’s all great, you know, but we’re accumulating 30, 35, 40 trillion, whatever the number is. It’s not sustainable. So, you know, it’s happening now. That reckoning.
Dustin Olsen (24:41.024)
Right, yeah, it’s…
At some point, it either has to be fixed or it all comes crashing down. Right?
Daniel O’Connor (24:52.61)
Yeah, yes. So I think it’s well intentioned and you know, we just have to and from our vantage point, you know, he’s left it open so there could be some reciprocity and you know, some it’s going to be very interesting from a critical minerals rare earth element sector and especially everything we’re learning we’re applying and we’re going to see in real time.
when unfolds.
Dustin Olsen (25:26.158)
Yeah, if we thought yesterday was exciting, I still believe he’s just warming up.
Daniel O’Connor (25:35.108)
Oh yeah, no, this is the most disruptive thing I’ve seen in my lifetime, in terms of the world order, economy. It’s serious.
Dustin Olsen (25:51.468)
Yeah, he’s not messing around. So, all right, Daniel. unless you have any famous last words, I think we can wrap this one up. What do you say?
Daniel O’Connor (26:03.172)
I want to say onward and upward that everybody should, regardless of how crazy life is and what’s going on in the world, you have yourself, if you have your health even better, work hard, stay focused. There’s going to be a lot of opportunities coming. And so it’s like what we’ve done with Rare Earth Exchanges. Before October 10th of 2024, which is only a few months away, this didn’t exist, this platform. Now there’s…
Thousands and thousands and thousands of people coming and it’s just start so you see we did that We started up you and I lots of constraints look what we’re doing. So
There’s going to be a lot of opportunity, but people have to kind of think out of the box and be ready to change. That’s very important. Be ready to not do things the way you always did. Be ready to be open-minded and consider new ways. Technology like AI, you have to work with these things.
Dustin Olsen (27:01.462)
Yeah. sage advice right there. And, know, you have to be ready for the opportunity to take advantage of the opportunity. Right. So, in a way, you know, buckle down, keep your head down, but keep that one eye open so you can see the, the opportunities coming.
Daniel O’Connor (27:16.59)
Good perspective.
Dustin Olsen (27:24.878)
So, alright Daniel, thanks for chatting this week.
Daniel O’Connor (27:27.704)
You got it. Thank you.
Daniel O’Connor (27:40.897)
Love that.
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