Rare earth elements, which are essential for the creation of several high-tech products and green technologies, have a significant impact on the world economy.
China maintains a privileged position among these components, both in terms of production and reserves.
This has raised questions about China’s dominance of the rare earths market and its possible effects on global supply chains.
Concerns about the security of resources, trade tensions, and efforts to diversify supply sources have been raised as a result of the ongoing conflict between the US and China over rare earths.
With around 80% of the world’s supply, China is the rare earth element industry’s top producer. China now has considerable control over the industry thanks to its dominance, giving it the power to regulate pricing and determine the course of international trade.
Large reserves and low production costs in the nation have further cemented its status as the world’s top supplier of rare earths.
To meet domestic demand, the United States heavily depends on imports of rare earths from China.
Geopolitical Risks And US Reliance On China For Rare Earths
These components are essential for a variety of sectors, including electric vehicles, renewable energy, electronics, and defense systems.
However, this reliance on China raises questions about the susceptibility of the US supply chain and potential dangers brought on by geopolitical unrest.
The United States and its allies have been aggressively pursuing steps to lessen dependence on China because they recognize the necessity to guarantee a trustworthy and diversified supply of rare earths.
Increased domestic production of rare earths, cooperation with nations that have large reserves, and research into recycling technology to recover rare earths from electronic waste are just a few of the initiatives being made.
To secure a steady supply of rare earths as nations work to lessen their reliance on a single source, it is essential to promote international cooperation, make investments in research and development, and look into alternate sources and recycling techniques.