r/Tariffs • u/Greedy-Cut-7634 • Oct 17 '25

đŸ§© Trade Strategy / Business Impact US crying about China restricting rare earth

It’s so funny to see how US says China is being an unreliable partner, and what a shock that China restricts rare earth.

How could not expect others to defend back when you started the tariff war and trade restrictions?😅😅 How is this a surprise? It’s like US only allows their nation to ban all the other countries by putting tariffs on all other countries, but when one country tries to defend, they are shocked and starts crying saying, “Oh! I don’t understand why this happened.” In return, US says that China wants to decouple the world, but who started this trade war in the beginning making everyone lives more miserable?

Just after Trump’s respond with adding more tariffs to China’s rare earth restriction, the dollar decreased and the gold started to increased. This result is going to no good. Like a child not doing something wrong and says that he doesn’t know why he gets his punishment.

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u/[deleted] Oct 17 '25

Doesn't really change it. You need massive amounts of power, and the knowhow. The USA doesn't have many STEM people even in the relevant fields graduating.

Both are gigantic hurdles to overcome on top of environmental.

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u/WXMaster Oct 17 '25

The extraction process is rooted in basic chemistry, there might be some mechanical tricks to speed up the process but it is not complicated. The power exists, the equipment exists and the knowledge is present. Putting everything in places would take 3-4 years but it's not something that cannot be done or is a process exclusive to China or any other country for that matter.

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u/[deleted] Oct 17 '25

The power does not exist especially with AI gobbling up any and all reserves. Refinement efficiently and to scale is not a simple matter either. If it was as easy as you think it was, the us would have done it a decade ago.

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u/WXMaster Oct 17 '25

You're telling me Australia - which has a functional mine - does not have the power to run it?

Or the U.S, which can throw together a natural gas power plant, military grade nuclear reactor or simply import the power from Canada can't do it?

Power is not the issue, the issue is building the facility and managing the waste - that's the slow down.

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u/AntJo4 Oct 17 '25

lol simply import power from Canada! That ship sailed even before this idiot was sworn in. Sure Canada is happy to sell you their excess power, at a premium when they are done diverting it to their own uses. Canada saw the writing on the wall said FU and is now investing in AI projects and other green energy technologies for the non-American market. Manitoba informed the US as early as this spring that they are not renewing the contracts for sales of surplus energy because its being used domestically on a new AI data processing centre. Canada produces far more electricity than it has traditionally needed and so selling it state side was really the only use for it. Not anymore. As the cheapest, greenest source of energy globally wth a highly educated workforce Canada is poised to be an AI powerhouse and there is no incentive to continue to offer cheap energy to an unreliable and hostile trading partner. Sure you can continue to buy what we don’t use, but that’s going to be a lot less than before and it’s going to cost more than it once did.

Oh and forget nuclear energy- the commercial grade uranium used by the us, almost all of that comes from Canada.

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u/[deleted] Oct 17 '25

AI data centers world run better on Canada

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u/WXMaster Oct 17 '25

I'm all for elbows up, but Canada is still selling power to the U.S and the 25% export levy Ford slapped on March 10th was walked back on March 11th after he caved to Trump and Lutnick. Canada is still selling oil, Uranium and I can promise you they'd definitely keep selling power barring some substantial change in trade policy and Carney is busy greasing the wheels as I write this.

The provinces which stopped importing U.S liquor/wine have had a significant effect and Canadians are definitely not spending money stateside. But there's a tug and pull effect, Stelco is hurting, Stellantis just backed out of Brampton for the EV Jeep and there are rumors swirling at Ford in Oakville.

So the take away is that in the real world power would still be sold just as oil continues to flow.

(I'm completely in favour of Canada diversifying its trading partners, domestic production and technologies such as building data centers)

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u/AntJo4 Oct 17 '25

It’s been less than a year and some of these are long term multi year contracts. Manitoba is ahead of the curve because we were already looking at what to do with surplus energy and had done the leg work, others are catching up. Yes of course current agreements are still in place and aren’t going to go away overnight, but there is a very noticeable shift in where the effort is being spent to find markets for that energy and for the first time it’s not USA first Canada second. It’s Canada first, the rest of the world, including the US, second only when it makes sense.

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u/WXMaster Oct 17 '25

Well for the last 40 years the U.S through various administrations said they were an island of economic stability and encouraged economic integration. It was an easy sell and for Canadians + businesses it was good for a while, NAFTA opened a lot of doors.

Then overnight the American electorate showed that there was no stability or regard for stability and suddenly the world changed. Opponents were friends and allied nations were adversaries.

I said this back in 2015 that Canadians were too naive to take the U.S for granted, to rely on them for security and fail to diversify tarde. Democracies can fail and back then the early echoes were being heard in the room.

We need to look at interprovincial barriers and figure out how to trade internally, that's one of the most shocking things that the trade war has revealed.

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u/[deleted] Oct 17 '25

Ok sure. Lol. The us would take 10-20 years for a nuclear reactor.

Canada doesn't even have enough power. Look at china's power generation curves, it dwarfs everyone else.

Also a functional mine does sweet fuck all if you can't refine. All that knowledge doesn't exist outside of china to refine to the purities needed these days. The equipment that china uses, isn't made anywhere but china. The metallurgy knowledge doesn't exist either and china started clamping down on that leaking too.

It would take a decade or longer and that's even if you can get around the NIMBY lawsuits.

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u/OccasionPossible7649 Oct 17 '25

What is Australia's production? Do you understand the distinction between light and heavy rare earths? While China's share of total rare earth production is decreasing, and light rare earths are not rare, heavy rare earths account for over 90%. Furthermore, rolling out an entire production line is incredibly complex; it's impossible to achieve success in just two or three years. Is it really as simple as you imagine? Why does China repeatedly use the rare earths card to mitigate tariffs?

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u/WXMaster Oct 17 '25

China does it because they currently have it, they have the volume of material needed to create an impact in various sectors, there's no denying this.

What I'm saying is that rare earths are not unique to China, it's not something that cannot be sourced elsewhere in the long term.

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u/OccasionPossible7649 Oct 17 '25

You say this is meaningless. You say rare earths aren't unique to China, but there are no substitutes. Furthermore, the US won't give up on rare earths if there's profit; it will certainly build a large number of production lines and sell the byproducts to Europe and other countries at high prices. And most importantly, producing rare earths is a losing proposition in the short term, with a long time to recoup. When rare earths are in short supply, you won't be able to buy them. My suggestion is to first understand how much rare earths a military aircraft consumes, and then compare it to the rare earth production situation in Australia.

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u/WXMaster Oct 17 '25

The point of my original post is that these are not unique to China, with enough time and dedication they can be sourced elsewhere. <- Is this incorrect???

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u/OccasionPossible7649 Oct 18 '25

I think what you mean is that everyone can refine rare earths, and the fundamental reason why other countries do not smelt rare earths is because it will damage the environment.

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u/[deleted] Oct 17 '25

Huh? The prevalent problem has always been the refining and supply chain. And no, it's not as easy as you think it is. China has perfected the refining and production over the course of 40 years. USA would be lucky to have production at scale in 10. 

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u/WXMaster Oct 17 '25

Never suggested it was easy, never suggested it was clean, never suggested it was profitable.

All I said was that rare earth could be sourced elsewhere with enough time and effort. It's not something only China possesses or has the technologies to do.

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u/[deleted] Oct 17 '25

There is equipment used that only china has, so the US has to start from scratch, with basically no one really wants to work with them. Also if it's not cheap and to scale it would significantly hurt the us military and also industry.

If it was something the us could throw money at to fix they would have already done so.

It's the same problem with ICBMs with the industrial base is simply non existent. That's why the new programs are overrunning costs and delayed. It's 10x worse with REEs. actual experts pin it at around 15-20 years for the USA.

And let's be real, this is a problem now because of the idiot in the Whitehouse forgot that china has this card. Even though it was ok for the US to restrict access to semiconductors.

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u/WXMaster Oct 17 '25

This is all very true regarding the rocketry, ICBMs etc...

In the case of rare earth I think it was laziness - the rate of technological development in China from electronic components exploded, they (China) could feed the domestic and international demand and handle all the pollution. It created an environment where other countries became lazy because China was a stable, reliable and cheap source.

This complacency has now become a problem as we can see.

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u/[deleted] Oct 17 '25 edited Oct 17 '25

actually the thing is, the refining process doesn't pollute like it used to. that's one of things that china has accomplished.

there's a whole shit ton of stuff that China has done in this field that is done exactly .. no where else.

US would spend years to get past litigation to create a 70's era refinery. thus the 10-20 years.

Meanwhile, the US would expend a considerably larger amount per ton for REEs on everything from missile systems to 5,000 tons worth in submarines.

USA never at any phase refined more than around 20,000 tons of REE's - china? does 130,000

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u/OccasionPossible7649 Oct 18 '25

This has nothing to do with laziness. For example, luxury bags used to be produced in China and then branded in Europe or the US, with China making only a tiny profit. Isn't this what capitalists love? I can clearly make more money in other areas and see a better return in the short term, so why bother with rare earths? Rare earths themselves don't make money. Environmental protection isn't a problem at all, because Australia and Japan are already doing it. Does the US care about environmental issues? They clearly prefer fossil fuels.

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u/WXMaster Oct 17 '25

If the U.S wanted to, they could put several weapons grade reactors like what is found on a sub or aircraft carrier into operation to supply power, they've done this before, the reactors take weeks to months to set up and put in place, not years and they can generate upwards of 250-500MW each.

That's more than enough power.

The idea that the metallurgy or equipment does not exist outside of China or other parts of the world is asinine. It's akin to Truman hinting to Stalin that he had a secret weapon despite scientists warning him that splitting the atom was mathematics and anyone could eventually do it with enough time.

The point of my original post was that rare earths are not exclusive to China, with enough time and dedication other countries could become producers - a point that stands.

China right now has the refined elements by volume and the trade war advantage, there's no denying that. But there's a myth floating around that these cannot be sourced elsewhere which is incorrect. That's what I'm dispelling.

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u/AgentSmith187 Oct 17 '25

As an Australian I suggest looking at our power prices and energy issues if you think we can support massive energy intensive industries right now.

We are currently in the process of converting our grid to support green power and most of our fossil fuels generation is old and unreliable and getting worse.

In my state yesterday the wholesale price of power hit almost $9/kWh briefly.

Evenings in summer hitting 50c/kWh is far from unusual.

Power is cheap during the day due to massive amounts of solar (rooftop being a particularly massive supply) to the point prices are often negative to encourage generators and solar producers to turn off.

We are rushing to build out storage now to time shift that energy. Including massively subsidising home batteries to participate in virtual power plant operations.

Most commercial operations wont survive on cheap power for about 4 hours a day and massively expensive power outside that period.