China’s Dominance in Critical Minerals Could Escalate U.S.-China Strategic Competition
China holds a virtual monopoly on the mining of crucial minerals needed for the production of semiconductors and other technologies, according to a recent report by JPMorgan. This dominance has raised concerns about the potential for these minerals to become the next battleground in the ongoing trade war between the U.S. and China.
President Biden’s recent announcement of tariffs on $18 billion worth of Chinese imports has further intensified the debate over China’s control of the critical minerals supply chain. In 2022, China produced the majority of the world’s rare earth minerals and graphite, essential components for various industries including electronics, automotive, and defense.
JPMorgan’s experts warn that the increasing reliance on these critical minerals poses a risk for the U.S., as China could potentially use its dominance in the supply chain as a tool for retaliation against U.S. industrial policies. The trade war between the two countries, which began in 2018, has only exacerbated tensions, with a particular focus on semiconductor production and intellectual property rights.
The U.S. Geological Survey has identified several minerals critical to the American economy and national security, for which the U.S. is heavily reliant on imports. China serves as the primary source for many of these minerals, posing a significant vulnerability for the U.S. economy.
While there are concerns that China may weaponize its near monopoly on critical minerals, JPMorgan’s analysts believe that the response is likely to remain limited. They recommend diversifying mineral sourcing, investing in new mining technologies, and strategic stockpiling of key minerals to mitigate potential risks.
In conclusion, the U.S. must explore alternative sources for critical minerals to reduce its dependence on China and safeguard its industries from potential supply chain disruptions. By implementing strategic measures, the U.S. can protect its interests and maintain stability in the face of escalating tensions with China.