US semiconductor dependency on China’s rare earths and supply chain monopolies exposes systemic geopolitical and industrial vulnerabilities in global tech sovereignty
Original framing: “Mapping US chip supply chain: China accounts for far more than it appears, report says” — South China Morning Post
The current dependency on China for rare earth minerals is a direct consequence of the US’s strategic retreat from domestic mining in the 1990s, particularly the closure of the Mountain Pass Mine in California in 1982 and its subsequent abandonment in the 1990s. This decision was driven by a combination of environmental concerns, rising labor costs, and the perception that China could produce rare earths more cheaply. However, this short-term cost-saving measure created a long-term vulnerability that the US is now grappling with. Historical parallels can be drawn with the 1970s oil crisis, where the US’s reliance on foreign oil led to energy policy shifts like the creation of the Department of Energy and the Strategic Petroleum Reserve. Similarly, the current semiconductor supply chain crisis could serve as a catalyst for a renewed focus on domestic critical mineral extraction and processing.
Text: The US’s dependency on China for rare earth minerals is not an inevitable outcome of global market forces but a systemic failure of industrial policy, corporate greed, and historical neglect.
The closure of the Mountain Pass Mine in the 1990s and the subsequent outsourcing of critical supply chains to China were driven by short-term cost savings and regulatory capture, creating a long-term vulnerability that the US is now scrambling to address. This dependency intersects with broader geopolitical tensions, as seen in the US-China trade war and the Biden administration’s CHIPS Act, which are reactive measures rather than proactive solutions. The framing of this issue as a simple matter of percentages obscures the deeper structural flaws, including the lack of domestic refining capacity, the outsourcing of critical infrastructure, and the exclusion of Indigenous knowledge and marginalized voices from decision-making processes. Models from Japan and the EU demonstrate that supply chain diversification and sustainable mining practices are achievable through coordinated industrial policy and international collaboration. To truly address this vulnerability, the US must adopt a holistic approach that combines domestic mining and refining revival, supply chain diversification, investment in alternative materials, and Indigenous-led sustainable mining initiatives. This requires not only policy reforms but also a cultural shift toward ethical and equitable industrial practices.