The US Needs to Hasten Its Rare-Earth Independence

US manufacturing may now be at its most vulnerable after decades of ceding crucial mining and production activities to China in the pursuit of low costs and higher company profits, and robust government support will be needed to narrow the time for securing the manufacturing supply chain.

China’s threat to curb the supply of rare-earth elements, which are crucial for making goods from autos and aircraft to headphones and vacuum cleaners, is a symptom of riding for too long the peace dividend after the Soviet Union’s collapse in the 1990s. The single-minded pursuit of global efficiency, supercharged by China’s entrance in the World Trade Organization in 2001, has backfired. With the clarity of hindsight, it’s easier to recognize the long game that sucked much of the life out of the US manufacturing base. As China geared up methodically to exert itself around the globe, the US was content to import low inflation and enjoy an extraordinary period of interest rates near zero.