A MART脥NEZ, HOST:
President Trump is calling for the Commerce Department to look at the possible security risks from America's reliance on imported rare earth minerals. Those are 17 elements that are difficult to mine, but are crucial for U.S. defense. And the ask comes after China curbed exports of some of those minerals as part of its retaliation against American tariffs. China dominates the rare earth mineral market, mining about 60% of the world's supply. And the White House says America's dependence on imports exposes the country to, quote, "economic coercion."
So does this give China an advantage in the trade war? I asked Gracelin Baskaran about that. She directs the Critical Mineral Security Program at the Center for Strategic and International Studies. And we'll note we spoke before the president ordered the security review.
So, Gracelin, what minerals exactly are we talking about here? Rare earth minerals sounds very, very space age.
GRACELIN BASKARAN: So rare earth minerals are actually a misnomer because they're not rare. They're actually found everywhere. However, they're found in very small quantities in a lot of places. There's two types of rare earths. We have light rare earths, and we have heavy rare earths, and we - they're categorized by literally their weight. Now, these restrictions are targeted at heavy rare earths. And the difficulty is is that China actually processes near a hundred percent of these, which means not only do they mine them, they source heavy rare earths from around the world, bring them back, and they separate them - where they take the actual rare earths out of the rest of the rock - in China, which makes the rest of the world highly vulnerable to any restrictions that they place.
MART脥NEZ: Are they pretty much the kingpin there on rare earth minerals?
BASKARAN: China has an absolute dominance here.
MART脥NEZ: And what does the U.S. military use rare earth minerals for?
BASKARAN: So rare earths are used in almost every form of defense technology, from warships and fighter jets to missiles, lasers and tanks. And for you to understand just how much of them we use, in an F-35 fighter jet, we use about 900 pounds of rare earth elements.
MART脥NEZ: So is the U.S. looking at a situation where they might have to stop building things for its defense?
BASKARAN: The U.S. does have capabilities; however, we are very late to the game. So we have actually given out over $400 million through the Defense Production Act to build those separation facilities here in the United States. But the difficulty is mining and processing is a long-term effort. I can't just build that overnight. The second thing is we do have stockpiles in the U.S. The big question mark for us is this is not a ban on rare earth. What China is doing is they are making companies apply for a license to export these materials. We don't expect this to be a transparent process.
While China works out that licensing process, we will have a pause, and the hope is that our stockpiles will tide us over. But ultimately, if China wants to make these restrictions more strict, for example, by putting in a ban, that would potentially cause disruption to both military use but also our civil use. I mean, rare earths are in the - in your MRI scanners and your PET scanners, for example.
MART脥NEZ: So are these restrictions, you think, impactful enough that China could force the U.S. to back down from tariffs?
BASKARAN: It's a very powerful negotiating tool that they have. Absolutely. At the end of the day, the U.S. is going to have to make a decision, whether it's going to continue on its tariff trajectory with China but at the cost of the very minerals that we need for our national security, our economic competitiveness - they are in your semiconductors and your iPhone - and our energy resilience because they are in most forms of energy technology as well.
MART脥NEZ: Gracelin Baskaran is director of the Critical Minerals Security Program at the Center for Strategic and International Studies. Gracelin, thanks.
BASKARAN: Thank you so much for having me.
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