#rare-earth-metals

#rare-earth-metals

On Friday morning, the S&P 500 was less than a couple of points from another all-time high. Then, after a single social media post from President Donald Trump, $2 trillion in market value was wiped out. The unraveling shows the sway the president's one-man trade policy still has over the fate of the global economy. Trump at 10:57 a.m. ET wrote on his Truth Social platform that China was "becoming very hostile" with the rest of the world, especially when it comes to its control of rare earth metals. He accused China of holding the world "captive" because of its "monopoly" on these crucial resources.

China introduced restrictions on its rare earth exports in April, two days after Trump announced retaliatory tariffs. In July, India's best-selling electric scooter, Bajaj Auto's Chetak, hit a big speed bump. A shortage of rare-earth metals had hit production plans, and the company was forced to almost halve its output. Bajaj manufactured just 10,824 units of the Chetak in July, as compared with 20,384 units during the same period last year, due to rare earth shortages.

Energy Secretary Chris Wright emphasized the significance of extracting rare earth elements from coal to reduce reliance on China for crucial tech and military products.

Instead, that's the exact opposite of what happened. Just a day after Lutnick announced a deal had been signed, news broke that Trump is on the cusp of signing executive actions which would dramatically escalate the so-called "AI arms race" with China.

China's delicate balance of leveraging its rare earth supply while avoiding overreach is crucial in managing its trade relations with the U.S.

China dominates the mining and processing of rare earths, a collection of 17 elements that are essential to the auto, semiconductor, aerospace and defense industries.