Lessons of the Rare Earths Showdown

How can the United States make its economy more resilient not just to future economic shocks but the threat of such shocks from its geopolitical rivals? 

Arnab Datta has spent years working on this very question. In the immediate aftermath of the recent rare earths showdown between America and China, Datta and his colleagues at the Institute for Progress and Employ America published a new analysis titled How to Implement an Operation Warp Speed for Rare Earths.

China’s global dominance in rare earths, acquired over decades, allows it to “gain leverage in trade negotiations, retaliate against American restrictions, degrade American and allied technological capabilities, and potentially even to entrench its dominance in downstream rare earth-dependent manufacturing supply chains,” write Datta, Saif Khan, Tim Hwang, and Tim Fist. 

The scope of the report extends well beyond the specific threat of a shock to America’s supply of rare earths. It speaks to the very nature of the ongoing geopolitical dispute with China itself — and more broadly, to the question of how best to respond when a single country has taken steps for decades to distort the global market of a product that the entire world depends on.

Why did the United States fail to spot the emerging threat? How should it respond now — and in such a way that embraces core American economic values like competition and innovation? 

Related links: 

• How to Implement an Operation Warp Speed for Rare Earths
• Arnab’s work at Employ America
• Arnab’s work at the Institute for Progress

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