The White House faces a pivotal moment after Beijing announced sweeping new controls on rare-earth exports. Yet, Cato’s Marian L. Tupy argues that when China attempted to restrict these metals before, global markets adapted and found alternative solutions.

Tupy notes in his piece that when China slashed global rare-earth quotas by 40% after its dispute with Tokyo in 2010, the strategy backfired. China’s quotas were regularly evaded, and manufacturers adapted fast. Refineries used alternative catalysts, magnet makers cut rare-earth use, and some switched to new tech entirely. This “demand destruction” softened the crisis even before a new supply arrived.

U.S. and Australian projects quickly ramped up production, cutting China’s rare-earth dominance from over 90% to about 70% by 2014. A similar playbook may be unfolding now: just this week, President Donald Trump signed a deal to secure Australian minerals and rare earths for the United States.

Global markets and human innovation are quite resilient in the face of attempted economic coercion.

You can read more from Tupy on this topic here: https://​www​.cato​.org/​c​o​m​m​e​n​t​a​r​y​/​c​h​i​n​a​s​-​r​a​r​e​-​e​a​r​t​h​s​-​a​r​e​n​t​-​r​a​r​e​-​y​o​u​-​think#

To reach Tupy, please feel free to contact Emily Salamon at esalamon@​cato.​org