China’s economic power is beginning to influence the politics and cultures of various countries. For example, even when the Trump administration imposed a 125% tariff, China was already preparing a countermeasure: a ban on rare earth exports. The Trump administration then made the blunder of hastily revising the 125% tariff. Even without the impact of the Trump tariffs, China’s export restrictions on rare earths are affecting automobile manufacturing in Japan and other countries. Rare earths, including heavy rare earths, are facing supply instability due to China’s export restrictions.
However, Japan is not without a plan. It has been developing powerful magnets. Proterial (formerly Hitachi Metals) is developing neodymium magnets that do not contain heavy rare earths, allowing them to be used in EV drive motors. This excellent product maintains performance even without heavy rare earths by utilizing technology to control the particle boundaries of the magnet. The United States is also not without a plan. MP Materials owns a rare earth mine in California and also engages in smelting. This company has mines and rare earth magnet manufacturing facilities in the United States. With government support, MP Materials is making a multibillion-dollar investment to establish a rare earth magnet manufacturing facility. MP Materials announced a strategic partnership with the U.S. Department of Defense. As China monopolizes rare earths, the Department of Defense is strengthening its domestic procurement mechanisms for military applications such as F-35 fighter jets and submarines.
Rare earths are perceived as being concentrated in China. However, this uneven distribution is an artificial artifact of the Chinese government. These materials are distributed globally, and their uneven distribution is not a problem. Previously, the United States, Australia, and Russia were the main producers. Around 1990, China’s share was 30%. Over the next 20 years, it grew to 97%. China steadily expanded its global market share through its rare earth dumping campaign. China’s low-price offensive forced rare earth mines around the world to suspend production. Nowadays, a certain percentage of these metals are recycled every year. Unlike before, they are now metals that will not run out unless the quantity is an issue. It is also possible to reopen mines by sharing rare earths stockpiled in other countries. It seems that China’s time to use rare earths as a weapon is running out. The time is approaching when new technological developments will turn rare earths into ordinary commodities rather than weapons.
