patrick.net

Non surprising Spoiler: It was all our neolib-con Governments over the past 25 years.

Much of the story centers around Magnequench, an American company that emerged out of General Motors in the 1980s. It specialized in the magnets that account for most of the final components created from rare earth metals. But in 1995 Magnequench was bought out by a consortium that included two Chinese firms who took a controlling 62 percent majority share in the company. They also bought a big rare earth magnet plant in Indiana. Eventually, Magneuquench's manufacturing capacities were moved to China, and the Indiana plant was shut down.

Executive branch regulators do wield power over foreign investment in and buyouts of American companies, particularly through the Committee on Foreign Investment in the U.S. (CFIUS). But this was the post-Cold War 1990s, when optimistic enthusiasm for globalized free market trade was at a peak. CFIUS approved the initial takeover of Magnequench in 1995 under the Clinton administration, as well as the later shutdown of the Indiana plant in 2003 under the Bush administration.

Lawmakers and the Government Accountability Office criticized the agency and both administrations for their lackadaisical approach to the issue. Hillary Clinton even struck a rather Trump-ian note in 2008, trying to turn Magequench's sale to China into a campaign issue. But it was a tricky topic, given how her husband's administration got the ball rolling. So rare earth metals have occasionally turned into a political hot potato, but usually for only brief periods.

But there's another side to this story: the rare earth Mountain Pass mine in California.

America's problem has never been a lack of rare earth deposits — it has plenty. The problem has been maintaining a domestic industry to mine the minerals and transform them into final components. For a while, Colorado-based Molycorp made a go of mining rare earths at Mountain Pass. But it struggled to turn a profit, and eventually went bankrupt. In the middle of last year, a bankruptcy proceeding sold the mine to another China-involved consortium. The Chinese partner in the consortium, Shenghe, will have exclusive sales rights to the mined product for a period of time, according to sales documents.

https://theweek.com/articles/765276/how-china-win-trade-war-1-move

I disagree with the conclusion, because China would not just shoot itself in the foot, but kneecap itself. Within a year we'd have rare Earth mines and refining and electronic battery making right here. Nobody would trust China anymore; foreign businesses would rethink outsourcing to China due to political supply reliability concerns.

But the story of HOW China went about controlling Rare Earths and subsequent refining and manufacturing products from it, is much like the story of Henry VII, who redirected the linen industry to England.