Summary

The trade war between the United States and China appears to be on the brink of escalation. Negotiations to find a common trade agreement have stalled, and the PRC has threatened to introduce restrictions on exports of rare earths to the U.S. China currently enjoys a quasi-monopoly over their production; meaning that the restrictions, if actually implemented, would result in higher prices for rare earths and would have a deep impact on the economy of the United States and the rest of the world. And while alternative sources of supply do exist, developing them will require considerable time and new investment.

Here’s what’s at stake in the brewing US-China rare earth dispute: