The U.S.-China trade war is dragging niche but indispensable parts of supply chains into the national spotlight, exposing the vulnerability of tech and other industries to future payback from Beijing. China spent this month flexing its muscles against U.S. trade restrictions — both from the outgoing administration of President Joe Biden, as it ties up loose ends, and in anticipation of President-elect Donald Trump’s return. One big target of crucial importance to the tech world is expected to be rare earth elements, the obscure metals essential to the making of everything from electric vehicles to quantum computers. China both produces a majority of the world’s rare earth minerals and reigns as the undisputed leader in processing them, thanks to its deals with mining operations in resource-rich countries like the Democratic Republic of the Congo. Last week, Beijing countered Biden’s latest round of export controls — which the White House had touted as the strongest yet on China’s access to advanced microchips — by outright banning the export of germanium, gallium and antimony to the U.S. Those three critical minerals are used in military equipment like night-vision goggles and by American chipmakers. Some analysts pointed out that China specifically chose them as a warning because industry would feel the impact without being crippled. William Reinsch, who oversaw export policies in the Clinton administration, described the minerals embargo as “shots across the bow,” more aimed at the incoming president than the current one. China is showing it can “make our lives very inconvenient,” said Reinsch, now a trade expert at the Center for Strategic and International Studies think tank. “The Chinese are good at looking ahead,” he said. “This is a message to the next administration.” China has flaunted its control over critical minerals before, when tensions escalated between Beijing and Washington during the first Trump administration. But full-scale U.S.-specific export bans on rare minerals are a fairly new approach, and China can “certainly do more,” said Barbara Arnold, a Penn State professor in mining engineering who has testified before Congress on the issue. (The tech trade war isn’t just being waged on the mineral front: In recent days, China also launched an antitrust probe into Nvidia, the American AI chipmaker and world’s most valuable company, and it clamped down on the flow of drone supplies to the Ukraine war effort.) The U.S. has some tools of its own to defend against a critical-mineral war, at least in theory. The American West is home to one of the world’s largest, most diverse and concentrated mineral belts. An antimony mine in Idaho just got the green light to reopen. And allies such as Canada sit on rich deposits of lithium, graphite and cobalt. Take gallium, for example. Before China came to dominate the market, several other countries produced gallium, U.S. partners included. Reestablishing the necessary industrial capacity outside of China will not happen overnight, but refining it is not an overly complex process, according to CSIS’s Matthew Funaiole. “It just became economically unfeasible for them to continue production once China ramped up its domestic industrial efforts,” said Funaiole, a senior fellow focusing on geopolitics and foreign policy. “The technical know-how and industrial frameworks outside of China still exist, or can be revived.” One problem: the tech and mining industries move on vastly different timescales. On average, it takes 16 years to go from discovering a mineral deposit in the U.S. to actually producing from it. The Idaho mine waited nearly a decade for government approval. Somewhere in the middle of those two timescales is the federal government, which also has a role in streamlining permits, encouraging domestic production with subsidies, stockpiling strategic minerals and controlling mining on public lands. Speeding up that process and shoring up a domestic mineral supply has been a priority for China hawks in Congress, with strong bipartisan support — and it’s expected to carry over when Republicans take over both chambers next year. The House China panel, which has a critical minerals working group, got a head start this week by releasing three bills to counter Chinese dominance. The bills, along with a fourth led by House Republicans to create a $2.5 billion critical mineral reserve, are part of a legislative sprint for the lame duck session. Meghan O’Sullivan, an international affairs professor and a deputy national security adviser under former President George W. Bush, cautioned the U.S. won’t be able to move fast enough on its own. “A range of constraints mean that tapping into the resources of other nations and supporting them in developing such resources is necessary,” she said. In the view of mining advocates, a key constraint is permitting and environmental regulations, a space where the Trump administration has shown eagerness to cut through red tape, but where local opposition is also a factor. On other fronts, Trump may be less receptive. One of the new House China bills emphasizes the need for immigration law exemptions for foreign specialists — a cause the tech sector backs, but is likely to be opposed by hardliners in the Trump administration.
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