It's important to note that mining these rare earth elements is pretty bad for the environment. There are ways to extract the desired minerals from the ore but of course that's more costly. China uses a lot of chemicals in their mines for cheap processing. Ramping up mining of these minerals in the USA would take years and some very critical debates about how much environmental damage is acceptable.
It's not like you can drill a hole in the ground and start pumping out rare earth minerals ready for use in manufacturing.
This TechSpot article touches a little on these issues:
China is one of the richest countries in the world in natural resources and not just in rare earth minerals or iron ore (for steel).
The rare earth mining element issue isn't China's only card in this trade war. They also hold about $770 billion in US Treasury bonds. That's a more dire concern for the US government. If China (or other countries) decide to dump Treasuries, there's a very real risk of serious economic downturn.
We already saw a little of this last week when the bond market went a little bonkers and Trump removed his foot off the tariff pedal for a couple of days (as he put it "queasy"). China has several other arrows in their quiver; they can damage the USA (and the rest of the world) in other ways. They do have to be careful otherwise they might incite other countries to retail against them as well.
China shutting off rare earth mineral exports is a red flag. They aren't playing around.
They don’t even have to sell the Treasuries they have. Just stop buying anymore will be enough.
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