The US Pentagon has presented a report to Congress on rare earning minerals with one goal in mind – to reduce the reliance on China. Rare earth minerals exist, for the most part, in China and North Korea, two countries that can be problematic for the US and Japan. But for the US, the Pentagon uses rare earth minerals in tech and of course in some high tech weapons. The move by the Pentagon to reduce rare earth minerals was triggered after China threatened to use its dominance in these natural resources.
The biggest Chinese newspaper (this is in an article by CNBC), used a phrase that has only be used in war in the past. China`s rare earth materials, is only a small part of the US goods deficits with China, but are used in iPhones, electric vehicles, and advanced precision weapons.
So the US and China are now moving down a road that will likely lead to a protracted trade war and a future that could trigger an economic crisis in Europe and even Asia. If the US and Chinese economies start to break down, the global economy could fade into recession. And with the US having only one rare earth mineral mine, the risk for shutting down some sectors or the costs increasing dramatically, it a factor that US tech firms and the Pentagon must keep in mind.