China's Rare Earth Grip Sparks Economic Fears: Wilbur Ross Warns of Beijing's Strategic Advantage

China's Rare Earth Dominance Sparks Economic Concerns Former U.S. Commerce Secretary Wilbur Ross has sounded the alarm on China's control of rare earth minerals, warning that Beijing is using these strategic materials as a "very useful weapon" against the United States. In an interview with Fortune, Ross stated, "For giving up a little bit of revenue, they are achieving a pretty good bang for the buck." He emphasized that while China does not control most of the world's rare earth mines, it dominates the refining and processing systems, where 90% of global capacity is situated. Rare earths, comprising 17 obscure elements like neodymium and dysprosium, are crucial components in high-tech products such as smartphones, laptops, and electric vehicles. China's grip on these minerals has significant implications for U.S. industries, particularly those reliant on rare earth imports. Ross's warning comes at a time when the United States is already grappling with the economic consequences of China's dominance in rare earths. In 2020, the U.S. Commerce Department reported that China accounted for approximately 80% of global rare earth exports to the United States. The former commerce secretary's comments echo concerns raised by industry experts and lawmakers about China's strategic use of rare earths as a bargaining chip in trade negotiations. "China has learned how to use these minerals as leverage over the United States," Ross noted. Background on the issue reveals that while China does not control most of the world's rare earth mines, it dominates the refining and processing systems due to significant investments in infrastructure and technology. This allows Beijing to dictate global supply chains and exert influence over industries reliant on these strategic materials. Industry insiders and experts offer varying perspectives on the situation. Some argue that diversifying supply chains and investing in domestic production could mitigate the risks associated with China's dominance. Others caution that such efforts would be costly and time-consuming, potentially disrupting critical industries. The current status of rare earth trade dynamics remains complex, with ongoing tensions between the United States and China. The U.S. government has imposed tariffs on Chinese imports, while Beijing has retaliated with its own trade restrictions. As the global economy continues to navigate these challenges, experts warn that the stakes are high. "Rare earths are not just a commodity; they're a strategic asset," said Ross. "The United States needs to take a more proactive approach in addressing this issue." *Reporting by Fortune.*