Posted by on July 23, 2019 7:42 am
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By Daniel McGroarty, TES GeoPolicy Editor

 

 

Forget the trade war – the tech war is heating up.  After weeks of Chinese threats that it could cut off U.S. access to the essential technology materials known as rare earths, the Trump Administration today took a counter-action of its own.

 

 

Jennifer Dlouhy has the story at Bloomberg News:  “Trump invoked the 69-year-old Defense Production Act — once used to preserve American steelmaking capacity — to remedy what he called ‘a shortfall’ in production of the super-strong magnets made with rare-earth minerals neodymium and samarium.”  In fact, the White House published five separate Title III declarations, carefully identifying each category of rare earths plus the powerful permanent magnets — and the smart bombs and precision-guided munitions — they make possible.

 

 

The Defense Production Act dates to the early months after North Korea’s invasion of South Korea in 1950.  Title III of the act requires the specific finding made today by the president:

 

 

“domestic production capability for separation and processing of Heavy Rare Earth Elements is essential to the national defense.

 

 

Without Presidential action…, United States industry cannot reasonably be expected to provide the production capability for separation and processing of Heavy Rare Earth Elements adequately and in a timely manner.”

 

 

How will China respond to the new U.S. action?  And how quickly can the U.S. close the rare earths gap — with production today at zero, even as known U.S. rare earth resources exist — before China loses its leverage over materials the U.S. Government has deemed critical to “the national economy and national security?”

 

 


Daniel McGroarty, TES GeoPolicy editor, served in senior positions in the White House and Department of Defense, and has testified in the U.S. Senate and House on critical minerals issues.  McGroarty is principal of Washington, D.C.-based Carmot Strategic Group, and president of the American Resources Policy Network, a non-partisan virtual think tank dedicated to informing the public on the importance of developing U.S. metal and mineral resources.  The views expressed here are his own.