China is threatening to use rare earths exports as a tool in its bitter trade fight with the United States. Thus far, the threat is more rhetorical than real, but it is an option if China wants to escalate the dispute. Doing so would strip China of an important diplomatic fig leaf and make clear to the world that Beijing is ready to fight without constraint when challenged.
Rare earths are a group of 17 metals used in a wide range of high technology products, from cellphones to cancer treatment drugs to automobile emissions systems. They are also vital to advanced weapons and other strategic systems, such as jet engines, lasers, night vision goggles and displays, and as a result have been designated as "critical" by the U.S. government.
In fact, rare earths are not hard to find at all: They are spread throughout the Earth, but they are typically found in small quantities and mining them is an expensive and destructive process. China has become the world's largest producer of rare earths, accounting for about 70 percent of production and reckoned to possess over a third of global reserves. Just as important, China has encouraged the development of rare earth-processing industries, consolidating its grip over the supply chain. Since 2004, China has supplied about 80 percent of U.S. rare earth imports, prompting the Defense Department to raise concerns about that dependence.