Journal of Political Risk, Vol. 13, No. 9, September 2025

By Yan Bennett

For the purpose of securing American access to critical mineral supply chains and countering Chinese dominance in the sector, members of the Senate introduced the Critical Minerals Security Act in March of this year. During both his administrations, President Trump has made critical minerals a key component of his national policy. These developments show the strategic importance of critical minerals in the American economy and toward national security. 

 

Nevertheless,  these first steps are representative of only a small part of a more difficult challenge. Securitizing the critical mineral supply chain is a national security imperative demanding determined, long-term effort and public will. The path forward will require significant investment, strategic alliances, and, most importantly, public support.

Critical Minerals, Rare Earths, and Critical Materials: Why are They Important?

Critical minerals, rare earth elements, and critical materials are essential for their functional utility in technology, the economy, and national defense.¹ Critical minerals are a category of elements, including lithium, nickel, and cobalt, which are essential for batteries and other energy technologies. Rare earth elements are a subset of critical minerals that are notable for their unique magnetic and optical properties and used in motors, lasers, and electronics.² Despite their name, they are not geologically rare, but are difficult to isolate and extract. Critical materials is yet another term, but often used interchangeably with critical minerals, and includes other elements like aluminum and silicon that are essential for the economy and national security.³

In 2018, the Trump administration required the Secretary of the Interior to identify non-fuel minerals essential to the U.S. economy and national security, and whose supply chains are vulnerable to disruption. The subsequent Executive Order defined critical minerals as those that are “vital to the Nation’s security and economic prosperity,” yet dependent on foreign suppliers, which creates a strategic vulnerability for both the American economy and military “to adverse foreign government action, natural disaster, and other events that can disrupt supply of these key minerals.”⁴

The Problem: China’s Dominance on Processing

The primary threat to the critical minerals supply chain, however, is not the location of raw mineral deposits, which exist in abundance in the United States and many other countries, but that the world has become dangerously over-reliant on a single country for processing and refinement of the minerals into useable industrial inputs. In both mining and processing critical minerals, China dominates. ⁵

While China possesses domestic deposits of critical minerals, it controls the midstream of the supply chain. China has acquired extensive mining rights abroad, particularly in Latin America and Africa, where significant deposits of critical minerals exist.⁶  Because China is not averse to operating in countries that experience political instability and civil unrest, it has become the partner of choice for many authoritarian regimes that welcome Chinese money and investment in their illiberal governments.⁷

After mining, raw ores are typically shipped to China for processing. Here too, China has a strategic advantage.⁸ China’s dominance in critical minerals refining and processing comes from a combination of strategic government policies, state-backed investment, and a vertically integrated supply chain. Additionally, China is not averse to processing at the expense of environmental and labor standards, which allows it to process ores at a cost that few nations can match. Currently, China controls a significant portion of the global market, particularly in rare earths, lithium, nickel, cobalt, and copper.⁹ China controls upwards of 80% of global rare earth mine production and, “more critically, 85–90% of refining and processing capacity.”¹⁰ The United States currently has only one active rare earth mine. Because it lacks domestic processing capacity, American ore is sent to China for refinement and processing.¹¹ This gives China extraordinary leverage over global supply chains. 

China is willing to use this dominance as economic coercion in its foreign policy. As an example, China restricted rare earth exports to Japan due to a maritime dispute in 2010.¹²  As another example, China has imposed export restrictions on the United States with regard to  several critical minerals and rare earths since 2023.¹³ For the latest tranche of tariffs from the current administration, China has imposed additional restrictions.¹⁴  This economic coercion highlights the vulnerability of having a sole country as the primary processing and refining center for the world. 

The Economic Reality: Price Manipulation and Market Distortion

The security risks aside, the economic challenges that China poses are formidable. It is difficult to determine the true market price of critical minerals due to lack of transparency in China’s government practices. Chinese firms benefit from subsidies, tax breaks, and regulatory leniency that allow them to offer refined critical minerals at artificially low prices. However, it is clear that these materials would be significantly more expensive but for China’s unfair practices. China has had decades to corner the market on critical minerals, making it nearly impossible for foreign competitors to be profitable.

Additionally, China actively uses its market power to stifle competition. Simply by increasing production and thereby supply, it intentionally lowers prices to a point where non-Chinese producers find critical mineral processing to be highly unprofitable. This non-competitive behavior has been deemed “brute force economics,” because it “leverages a wide range of non-market practices to dominate supply chains, create resource dependencies,” undermine competition, and concentrate economic power.¹⁵ Since 2023, China’s central government has increased critical mineral exploration with $13.8 billion year-on-year increases while provincial governments have also significantly increased spending in critical mineral exploration.¹⁶  This is a classic example of China’s unfair competition in practice.

China’s decades-long head start in the critical minerals game is a core dilemma for the United States and its allies. Consumers are accustomed to artificially depressed prices through Chinese market manipulation. This leaves the U.S. a difficult choice: continued reliance on low-cost Chinese inputs or make the substantial investments necessary to rebuild domestic and allied supply chains. 

The Path Forward: Strategic Action and Public Commitment

Securitizing the critical mineral supply chain requires that the U.S. adopt a comprehensive approach combining domestic policy with international diplomacy. President Trump made an early and important contribution by recognizing and elevating critical minerals and its supply chain to the level of national security policy. In his second administration, he has lost no time in issuing additional executive orders to strengthen American mineral supply chains. Congress has also recognized the importance as well by introducing the Critical Minerals Security Act earlier this year. Meanwhile, the Department of Defense has taken an innovative first step by investing in domestic mining and processing capacity to build industrial resilience.¹⁷ Diplomatically, the United States is implementing “friend-shoring” and “near-shoring” strategies through initiatives such as the Minerals Security Partnership (MSP)¹⁸ and the Indo-Pacific Economic Framework (IPEF) to build resilient supply chains with allies and partners. ¹⁹

Ultimately, however, the most difficult challenge may lie at home. Americans have grown accustomed to the artificially low prices on products that rely on China’s subsidized minerals, including everything from smartphones and electric toothbrushes to electricity produced by wind turbines and stored on lithium batteries.²⁰ A secure supply chain will require the American people to accept higher prices in the near term as the cost of building resilience and reducing dependence. Securitizing critical mineral supply chains is not just a matter of policy or markets, it is also a test of national will. In the 21st century, both sacrifice and sustained commitment will be demanded for economic and national security.

Conclusion

Establishing resilience in critical mineral supply chains is not just a matter of economic competitiveness, it is an imperative for national and economic security. While recent legislative and executive actions mark important progress in the recognition of the problem, they represent only the start of a long-term, future-oriented strategy requiring bipartisan commitment, sustained investment, and engaged diplomacy with allies and partners. Perhaps more importantly, the American public must be prepared to bear short-term price adjustments in exchange for long-term security. Reducing dependence on China is critical to American national security—and it will neither be easy or fast—but is essential to protect and defend the American people and their future in this strategic competition with China.

Dr. Yan Chang Bennett is an expert in foreign policy and international law, former tenured Foreign Service Officer and professor of international affairs. Her practical experience and academic scholarship are in political, economic, and legal issues.

References

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²  “What Are Critical Materials and Critical Minerals?,” Energy.Gov, accessed March 8, 2024, https://www.energy.gov/cmm/what-are-critical-materials-and-critical-minerals; “History and Future of Rare Earth Elements,” Science History Institute, n.d., accessed August 3, 2025, https://www.sciencehistory.org/education/classroom-activities/role-playing-games/case-of-rare-earth-elements/history-future/. “Geologically speaking, the rare earth elements are not especially rare. Deposits of these metals are found in many places around the globe, with some elements in about the same abundance in the earth’s crust as copper or tin. But rare earths are never found in very high concentrations and are usually found mixed together with one another or with radioactive elements, such as uranium and thorium. The chemical properties of the rare earth elements make them difficult to separate from surrounding materials and from one another. These qualities also make them difficult to purify. Current production methods require a lot of ore and generate a great deal of harmful waste to extract just small amounts of rare earth metals. Waste from the processing methods include radioactive water, toxic fluorine, and acids.”

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⁴ “Executive Order 13817: A Federal Strategy To Ensure Secure and Reliable Supplies of Critical Minerals,” Federal Register, December 20, 2017, https://www.federalregister.gov/documents/2017/12/26/2017-27899/a-federal-strategy-to-ensure-secure-and-reliable-supplies-of-critical-minerals.

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¹² Keith Bradsher, “Amid Tension, China Blocks Vital Exports to Japan,” Business, The New York Times, September 23, 2010, https://www.nytimes.com/2010/09/23/business/global/23rare.html.

¹³ Gracelin Baskaran and Meredith Schwartz, “The Consequences of China’s New Rare Earths Export Restrictions,” Center for Strategic and International Studies, April 14, 2025, https://www.csis.org/analysis/consequences-chinas-new-rare-earths-export-restrictions.

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