Pentagon working to reduce US reliance on Chinese rare earth minerals after trade war threat

Defense Department’s Patrick Shanahan, before he was tapped by President Donald Trump to serve as the department’s Acting Secretary

Department of Defense

The Pentagon presented a report to Congress on rare earth minerals in an effort to reduce reliance on China, according to a Reuters report.

“The department continues to work closely with the president, Congress and the industrial base to mitigate U.S. reliance on China for rare earth minerals,” Lieutenant Colonel Mike Andrews, a spokesman of the U.S. Defense Department told Reuters Wednesday.

The move came after China threatened to use its dominance in rare earth minerals as a countermeasure in the trade war with the U.S. The biggest Chinese newspaper explicitly warned the U.S. on Wednesday that China would cut off rare earth supply, saying “don’t say we didn’t warn you,” a phrase it only used twice in history, both of which involved full-on wars.

“The department recently submitted a Defense Production Act III rare earth mineral report to Congress, demonstrating the department’s continued focus on reducing reliance on China,” Andrews told Reuters.

The Defense Department did not immediately return CNBC’s request for comment.  

China’s rare earth materials, while only accounting for a small part of the $420 billion U.S. goods deficit with China, are crucial to the production of a slew of technology items including iPhones, electric vehicles and advanced precision weapons.

— Click here to read the original Reuters report.

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