NEW YORK — The potential implementation of tariffs and protective measures by the Trump administration targeting China may complicate the United States’ access to critical minerals, including lithium and various rare earth elements essential for defense, energy, and technology sectors.
China currently plays a dominant role in the global supply chain, refining over 90% of rare earth elements, which comprise 17 unique minerals such as neodymium and dysprosium. Despite their name, these elements are not particularly rare in nature, but they are challenging to extract and process due to their sporadic distribution in geological formations. Lithium, often grouped with rare earth elements, is also vital for the tech industry, powering numerous devices.
These elements are crucial for the functioning of modern technology; for instance, without them, smartphones wouldn’t have vibration capabilities, and computer hard drives would fail to operate. They are also integral to renewable energy solutions like wind turbines and electric vehicles—industries that the U.S. has been keen to grow and develop.
Currently, the U.S. relies on imports for over 80% of its rare earth elements, with a significant portion arriving from China. An ongoing trade conflict affects tech companies producing devices in China, as they face additional costs when shipping these products back to the U.S. due to import tariffs.
In February, President Trump imposed a 10% tariff on all imports from China, adding to previously existing tariffs on specific goods from the country that were established during his first term. In retaliation, China has enacted tariffs of up to 15% on a variety of American products, along with further restrictions on exports of key materials necessary for modern technology manufacturing.
Access to rare earth elements is vital for the development plans of smartphone manufacturers, renewable energy firms, and the overarching technology sector. In an effort to mitigate dependency on new mining activities, companies like Apple are increasing their use of recycled materials in batteries and devices.
Looking ahead, demand for these critical minerals is anticipated to grow significantly over the coming decades, influenced by advancements in artificial intelligence and computing capabilities. The International Energy Agency projects that total demand for rare earth elements could rise by 72%, reaching 134 kilotons between 2021 and 2030. However, supply is also expected to increase at a similar pace, but projected totals would still fall short of meeting demand, estimating only 98 kilotons of supply.
The strategic significance of rare earth metals has led to geopolitical maneuvering, as the U.S. and other countries seek alternative sources of these resources beyond China. Notably, the U.S. stands as the second-largest producer of rare earth elements globally, accounting for around 12% of total production.
Additionally, Trump’s interest in acquiring Greenland arises in part due to climate change, which is expected to reveal more of the island’s resource deposits as ice melts. These deposits include not only rare earth elements but also lithium and other valuable resources. Trump has also mentioned potential future assistance agreements with Ukraine, which is another nation that holds rare earth elements.
