A new congressional report warns that China’s control over the critical minerals trade gives Beijing dangerous leverage over the U.S. economy and military supply chain, calling for urgent national measures to counter “predatory pricing” and market domination.
By yourNEWS Media Newsroom
China’s manipulation of global mineral prices poses a severe threat to U.S. economic and national security, according to a new report released by the House Select Committee on China. Lawmakers said Beijing’s “predatory pricing” policies and control of the rare-earth supply chain amount to what Rep. John Moolenaar, R-Mich., described as “a loaded gun pointed at our economy.”
“From cell phones to fighter jets, every American is dependent on minerals that China manipulates for its own selfish interests,” Moolenaar said. “China’s predatory practices have caused American job losses, driven miners out of business, and jeopardized national security.”
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The report outlines how the Chinese government uses state subsidies, export restrictions, and strict price controls to maintain dominance in critical mineral production and processing. China currently controls about 70 percent of global rare-earth mining, 90 percent of separation and processing, and 93 percent of magnet manufacturing—components vital to industries ranging from renewable energy and electronics to advanced weapon systems.
In October, China’s commerce ministry announced new export restrictions on rare-earth elements essential for semiconductors, drones, wind turbines, and automotive components. The rule, which took effect this week, requires exporters to obtain licenses for shipping rare-earth minerals and technologies outside China.
The implications for U.S. defense manufacturing are far-reaching. Heat-resistant magnets produced in China are used in fighter jet engines, missile guidance systems, and precision bombs. The report warns that any disruption or price manipulation could cripple supply chains essential to the U.S. military.
The investigation found that Beijing has poured tens of billions of dollars into global mining operations—often through zero-interest loans—to secure foreign mineral assets. China’s government reportedly provided $57 billion in aid and subsidized credit to mining projects worldwide, effectively eliminating market-based price discovery. “This legal framework makes it illegal to publish prices that deviate from the government’s position,” the report said, giving China the ability to raise or lower prices to advance its strategic objectives.
“By controlling both supply and demand, the PRC can act as a swing producer when prices rise and suppress them when they fall, preventing markets from seeing the true price,” the report stated. This allows Beijing to wield critical minerals as a geopolitical weapon while maintaining near-total control of midstream refining and high-purity mineral production.
The report traces China’s dominance back to the early 1990s, citing former leader Deng Xiaoping’s remark that “there is oil in the Middle East, there is rare earth in China.” Lawmakers argue that current Chinese leader Xi Jinping has fulfilled that vision through state-directed consolidation of the entire rare-earth value chain.
The committee issued a series of recommendations to reduce U.S. vulnerability, including:
- Establishing a “critical minerals czar” to coordinate federal policy and financing.
- Accelerating domestic mining and refining permits.
- Offering tax credits and low-cost loans for U.S. mineral and magnet production.
- Creating a national strategic reserve of critical minerals.
- Supporting research, workforce development, and innovation in the domestic supply chain.
“Critical minerals are vital inputs for countless industries, including defense, energy, and healthcare,” said Rep. Rob Wittman, R-Va., the committee’s co-leader. “Establishing a strategic reserve is essential to strengthening America’s supply chain and ensuring national security. It is time to put an end to this dependence and put the U.S. at the forefront of global innovation.”
Lawmakers warned that unless the United States acts swiftly to rebuild its industrial base and secure independent access to rare-earth resources, China’s market manipulation will continue to endanger the stability of American industry and defense readiness.
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