Since the onset of the coronavirus pandemic, many Americans have gained a newfound understanding of rare earth elements and the uncomfortable truth that China has a tight grip on their mining and processing. Virtually everything manufactured today—think fighter jets, medical devices, and cameras—relies on these materials, and our dependence on China has become quite evident.
In light of this dependency, which some see as a national security risk, President Trump has initiated a comprehensive effort known as “Project Vault.” This initiative aims to shield Americans from sudden disruptions while working toward greater self-sufficiency in the future.
The Chinese government has not hesitated to leverage its dominance over rare earths as a means of pressure against manufacturing partners like the U.S. and Japan. Towards the end of Trump’s first term, China hinted at restricting exports in response to U.S. tariffs on Huawei. These warnings turned into action last year when China imposed export controls and banned the shipment of rare earth elements to foreign military entities. Although China retreated when Trump responded with his own tariff threats, the extent of our vulnerability was laid bare.
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Much of this challenge has roots in decisions made long ago. After World War II, the United States was at the forefront of rare earth production, particularly from the Mountain Pass facility in California. However, in 1980, the Nuclear Regulatory Commission categorized some rare earths similarly to radioactive materials, leading to strict regulations that made extraction expensive and impractical in the U.S.
The situation worsened when a wastewater spill at Mountain Pass in 1996 led to its closure in 2002 due to environmental concerns. Permitting for new projects here can take an astonishing 29 years. By the time Mountain Pass reopened in 2017, the Trump administration began moves to expand the facility by 2026. Yet, reviving America’s lost advantages will be a daunting journey, especially with the push for eco-friendliness often complicating matters.
In comparison, China has capitalized on a more lenient regulatory landscape, securing around 70% of rare earth mining and 90% of processing. During his first term, Trump attempted to level the playing field through Executive Order 13817, which pinpointed 35 vital elements and set forth a strategy for ensuring their supply. In 2020, he declared a national emergency around rare earths, urging an inter-agency effort to ramp up domestic production.
With a second Trump term, further initiatives could develop to lessen China’s overwhelming hold, including partnerships with countries like Australia for a more reliable supply chain than that from China. Project Vault seeks to fortify America’s position by reducing reliance on Chinese materials.
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Similar in concept to the Strategic Petroleum Reserve, which was introduced in 1975 to shield the U.S. against energy shocks from events like the 1973 oil embargo, Project Vault aims to create stockpiles of rare earths. This stockpile would be available for use by both the military and civilian sectors in case China were to cut off supplies.
The administration is also tirelessly working on deregulation and permitting reforms, hoping U.S. companies can resume mining and processing rare earths domestically, unhindered by the current administration’s initiatives like the Justice 40 program, which has restricted progress in this sector.
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In a bid to counter China’s monopolistic grip on rare earth elements, Trump has instructed the Export-Import Bank to back Project Vault with a $10 billion loan. This funding aims to establish stockpiles and ensure that U.S.-controlled production of rare earths is sufficient to support the defense industry without being beholden to China’s supply chain.
The Export-Import Bank has created a public-private partnership, known as the Vault Company, to supervise this initiative, ensuring that taxpayer investments are used wisely, enabling a quick re-establishment of the U.S. mining and processing sector.
Given the circumstances, ExIm is seen as a crucial national security asset, necessary to repair the damage inflicted by China in its attempt to monopolize the rare earths market. Thus, there’s urgency for Congress to move swiftly in reauthorizing the World Bank, not just to support Project Vault’s success, but also to sustain ExIm’s involvement in President Trump’s mission to safeguard Americans against Chinese aggression.
