China has suspended exporting certain rare earths that the United States relies on to make everything from autos to missiles, as per this front page article in the New York Times today. It quotes James Litinsky, chief executive of MP Materials, as saying that cutting off rare earth supplies to military contractors was of particular concern.
In “The New Art of War: China’s Deep Strategy Inside the United States,” which was published in 2019 and can be seen here, I spoke with Litinsky about what it would take to create a technology strategy against China’s obvious ambition to dominate the United States and the world. He had purchased the Mountain Pass mine in California, the only source of these rare earths based in the United State. He key concern was how to take the rare earths and have them processed into alloys and magnets that could actually be used to make things. He had to send his raw materials to China, which had developed the environmentally difficult ability to process the rare earths.
“Rare earths could one day emerge as a crucial choke-point for the Pentagon in is efforts to obtain the weapons and other materiel it needs,” I wrote. The heart of the problem was that the American system did not then, and certainly does not today, think strategically for the long term. We cannot find ways for our private and public sectors to cooperate to achieve national goals. We get hung up ideologically about the concept of “industrial policy.” The Chinese have no such problem. Which is why they are winning.
