Withholding
The United States and the European Union are strengthening their economic security by curbing China. According to experts, China is likely to counter with its rare-earth elements (REEs).
According to the United States Geological Survey, China accounted for 60 percent of the global total REE production in 2021, followed by the United States (15.4 percent), Myanmar (9.3 percent), and Australia (7.9 percent). That year, the United States was the biggest REE buyer in the world.
China’s REE weaponization began to accelerate in May 2019, when the U.S.-China trade war was at its peak. Two years ago, it founded China Rare Earth Group by combining three state-owned enterprises and two national research institutes. The group currently accounts for more than 70 percent of China’s REE output.
China has implied the possibility of REE export control repeatedly and the United States’ and European Union’s countermeasures are still insufficient. This is because the elements are extremely rare and production entails environmental damage.
In fact, the Chinese government already limited its exports against Japan during the Senkaku-Diaoyudao disputes in 2010. Despite Japan’s supply source diversification efforts, its current dependence on imported REEs is still 100 percent and that imported from China accounts for more than 60 percent of the imports.