The state of the US econonomy hinges on rare earth minerals from China
15 hours ago
- #rare earth minerals
- #US-China relations
- #AI bubble
- Donald Trump threatened new tariffs on Chinese goods in response to China's rare earth mineral export restrictions, causing Wall Street to take notice.
- The U.S. economy is heavily dependent on Chinese rare earth exports, particularly for AI infrastructure and data centers, making it vulnerable to Chinese leverage.
- AI investment is driving significant GDP growth, but much of the financing is speculative, resembling the dot-com and housing bubbles.
- China controls the majority of rare earth mining, processing, and magnet manufacturing, giving it significant geopolitical power.
- U.S. efforts to diversify rare earth supply chains have been inadequate, leaving the economy exposed to Chinese restrictions.
- Trump's trade war tactics lacked preparation and left the U.S. vulnerable to Chinese retaliation.
- The U.S. has a history of abandoning critical technologies, leaving it dependent on foreign suppliers.
- China's rare earth restrictions could burst the AI investment bubble, but also highlight long-term U.S. industrial weaknesses.