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To borrow the words of my colleague, CFR Senior Fellow Heidi Crebo-Rediker, in the pages of Foreign Affairs, critical minerals today are “America’s most dangerous dependence.”

With near total control of the world’s critical minerals production, China maintains significant economic leverage over access to inputs that are necessary for everything from everyday products like smartphones to advanced weapons systems like the F-35. A typical gas-powered passenger vehicle can use as many as forty rare earth magnets for its seats, brakes, and other systems; electric vehicles require more. Under the export control regime Beijing rolled out last week, China could restrict global access to critical mineral products, including rare earth magnets, and bring much economic activity to a screeching halt.

China is willing and able to exploit this strategic vulnerability. It has already proven its willingness to use export controls as a tool of economic coercion. Some fifteen years ago, China curtailed rare earths—a subset of critical minerals—to Japan over a dispute in the East China Sea. More recently, China has restricted its exports of critical minerals in response to the United States’ tariffs and export controls.

While China maintains that it’s not a ban, China announced new measures last week that build upon its earlier semiconductor-focused restrictions, extending to products made outside China that have as little as 0.1 percent of Chinese rare earths in them or use mining, separation, or magnet-making technology developed by Chinese firms. That is similar to the United States’ Foreign Direct Product Rule. Moreover, China has insisted that applicants for an export license submit schematics for products that use Chinese-produced minerals, a powerful tool for accessing proprietary intellectual property.

China did not become the dominant player in critical minerals overnight; it was a long march to get there. During his famous 1992 Southern Tour, while visiting Inner Mongolia’s Baotou rare-earth basin, Deng Xiaoping said, “The Middle East has oil; China has rare earths.” Rare earths are actually not rare, and certainly not present in China alone, but ever since Deng noted the importance of such minerals, China has developed a dominant position through decades of concerted industrial policy. For years, the Chinese government invested heavily to support firms at every step of the rare earth refining and production value chain, bolstering its domestic mining, refining, production, and recycling facilities, as well as expanding its network of foreign mines around the world.

Today, the biggest chokepoints in the supply chain for critical minerals are refining and processing (both in terms of capacity and intellectual property), not mining. China controls up to 90 percent of the world’s processing capacity, including more than 99 percent for three kinds of rare earths necessary for heat-resistant magnets. This has been achieved in part by subsidizing, producing, and engaging in pricing practices that made it economically unviable for competitors in the United States and other countries. Chinese firms also innovated in their own right—that’s why they possess the industry’s most valuable intellectual property and capacity to boot. And they also took advantage of the fact that the United States and other developed countries didn’t want to expand domestic mining and refining activity as a result of environmental consequences and other factors.

So where do we go from here? The two biggest impediments to the United States lessening its dependence on China are time and money. As many economic experts have noted, including the likes of Peter Harrell and Daleep Singh, we need to invest for the long term by boosting U.S. supply through price floors, offtake agreements, tax breaks, and regulatory relief. But we don’t need to do this alone. Rather, we should work with our allies and partners to undertake similar efforts, in parallel, to create a scaled, global ecosystem of trusted critical mineral producers that can match Chinese production and innovation.

These mines and production facilities take years to come online. By S&P Global’s estimate, the average mine in the United States takes almost twenty-nine years to come online, due to time-consuming exploration, permitting, and construction needs. And these facilities cost billions of dollars upfront. Without offtake agreements and government price floors to dampen volatile swings of global rare earth prices and demand shocks, it is unclear whether they would garner the necessary private investment.

The Biden administration focused on this issue, pursued a strategy of grants and loans, and engaged with allies and partners to build support for collective action. The Trump administration has gone further. In July, the Department of Defense took a 15 percent stake in the U.S.-based rare earth producer MP Materials for $400 million, set a price floor, and provided an offtake agreement. On Wednesday, Treasury Secretary Scott Bessent made clear that the United States would continue this approach, suggesting that it was looking beyond rare earths: “We’re going to set price floors and the forward buying to make sure that this doesn’t happen again and we’re going to do it across a range of industries.”

While it might be important for the United States to develop some production capacity here at home, it doesn’t have to play catch up entirely on its own. It should work with allies and partners to bring mining and production facilities online more quickly. This is something Bessent acknowledged this week, calling for a coalition of countries to come together to work on a collective response (consistent with a recent article arguing in favor of the U.S. convening “coalitions of the ambitious” to address this issue). Or as he put it, “we’re going to have a fulsome, group response to this, because bureaucrats in China cannot manage the supply chain or the manufacturing process for the rest of the world,” adding that he would be speaking with the United States’ allies.

Many of the partners we need are still smarting from the Trump administration’s tariff policies.  One way for the United States to catalyze their participation would be to leverage the balance sheets of the U.S. International Development Finance Corporation (DFC) and the Export-Import Bank for these partnerships. For example, take the Lobito Corridor project—a train corridor connecting Angola’s Lobito port on the Atlantic coast to Zambia through the Democratic Republic of Congo (DRC) financed by the DFC in partnership with the African Development Bank (AfDB), the Africa Finance Corporation (AFC), the European Commission, and the host governments of Angola, the DRC, and Zambia. Once completed, this railway will make it easier to not only export these minerals (and other products) but also incentivize further U.S. private investment.

I was somewhat surprised by the timing of China’s announcement. Perhaps it was to gain leverage in the run up to the potential summit in South Korea. Bessent is set to speak with his Chinese counterpart, Vice Premier He Lifeng shortly.

But the timing might illustrate a larger factor at work. China has worked assiduously over the last several years to position itself as the responsible party defending the status quo and upholding the multilateral trading system and painting the United States as a unilateral, revisionist, and disruptive actor. But, to borrow a phrase from another context and another region of the world, China never seems to miss an opportunity to miss an opportunity. While China has had the opportunity to significantly undermine the position of the United States as the global leader, it seems to have difficulty exercising soft power. The loan-to-own character of the Belt and Road Initiative ended up limiting the goodwill China generated among publics all over the developing world, notwithstanding the hundreds of billions of dollars it disbursed. And this export control announcement, which threatens to upend global supply chains, now positions China as at least as disruptive to the global economy as the United States.

Now, it’s up to the United States to capitalize on this moment to work more closely with our allies and partners to reduce our dependence on China and to reassert our role as a collaborative partner. It could take years, maybe decades, but you know what they say: A journey of a thousand miles begins with a single step.

Let me know what you think about the state of critical minerals and what this column should cover next by emailing [email protected]