The Rare Earth War: Why China Owns You (And What Trump Is Doing About It)
The game is changing.
Trump just signed a $1.4 billion deal. Rare earth startups. Two companies. Vulcan Elements and ReElement Technologies.
This is big. Really big.
China's Stranglehold: How China controls 90% of rare earth processing and uses it as a weapon against American technology and defense.
Trump's Counter-Move: A $1.4 billion government-backed deal to build American rare earth supply chains and break China's monopoly.
The New Cold War: Why the battle for rare earths is the real fight for the future, and how government equity stakes are changing the game.
How China Seized Control of the Technology That Runs Your Life
Why? Because China owns the rare earth market. They control 70% of mining. They control 90% of processing.
That means China controls your smartphone. Your fighter jets. Your guided missiles. Your wind turbines. Your electric cars.
China controls everything.
And they know it. They've been using it as a weapon. Restricting exports. Demanding special approvals. Playing games.
Trump met with Xi last week. They made a deal. Cut tariffs. Allow rare earth exports.
But here's the truth. We can't trust China. Not with our supply chain. Not with our national security. Not with our future.
That's why this $1.4 billion deal matters.
Vulcan makes rare earth magnets. ReElement processes rare earth minerals. They recycle old batteries. They're building the supply chain we need.
The deal is smart. $620 million from the Defense Department. $50 million from Commerce. $550 million from private investors.
The government gets equity. Warrants in both companies. They're not just giving money away. They're taking ownership.
This is how you play the game.
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In July, the Defense Department invested $400 million in MP Materials. The only American rare earths mine. The government became the largest shareholder.
A week later, Apple signed a $500 million deal with MP Materials. For magnets. For iPhones. For electric vehicles.
See the pattern? Government invests. Private sector follows. Supply chain gets built.
Trump is doing the same with U.S. Steel. Lithium Americas. Trilogy Metals. Taking equity stakes. Building American industry.
Some people don't like it. Economists. Former officials. Even some Republicans.
They say the government shouldn't invest in private companies. They say it's not the government's job.
I disagree.
China is winning because their government invests. They build supply chains. They dominate markets. They control the future.
We've been playing by old rules. Free market rules. While China plays by new rules. Strategic rules. Winning rules.
Trump gets it. He's changing the game. He's using government money to build American industry. To secure our supply chain. To compete with China.
This isn't socialism. This is survival.
What Rare Earths Really Mean (And Why You Can't Live Without Them)
Rare earths are in everything. Fighter jets. Drones. Nuclear submarines. Smartphones. Wind turbines. Electric vehicles.
Without rare earths, we have nothing. No defense. No technology. No future.
China knows this. They've been building their monopoly for decades. While we've been asleep.
Now we're waking up.
Vulcan and ReElement will produce 10,000 tonnes of magnets annually. That's a start. Not enough. But a start.
Commerce Secretary Howard Lutnick said it best. "We are laser-focused on bringing critical mineral and rare earth manufacturing back home."
That's the mission. Bring it home. Build it here. Control our destiny.
The Two-Sided Strategy China Never Saw Coming
The deal comes right after Trump met with Xi. That's not a coincidence. That's strategy.
Trump negotiated with China. Got them to ease restrictions. Then immediately invested in American alternatives.
He's playing both sides. Short term, we need China. Long term, we replace China.
Smart.
China had imposed restrictions. Foreign companies needed special approval to export anything with rare earths. Even if the product was made elsewhere.
That's power. That's control. That's a stranglehold.
Trump is breaking that stranglehold. One deal at a time. One investment at a time. One company at a time.
This is the new Cold War. It's not about missiles. It's about supply chains. It's about rare earths. It's about who controls the technology of the future.
China has been winning. For decades. They've been patient. Strategic. Ruthless.
Now America is fighting back.
The $1.4 billion deal is just the beginning. More deals are coming. More investments. More equity stakes.
The government is becoming a player. An investor. A partner.
Why the Free Market Failed (And Government Investment Is Winning)
Some people hate it. They call it government overreach. They call it picking winners and losers.
I call it winning.
China picked winners decades ago. Rare earths. Solar panels. Batteries. Electric vehicles. They invested. They built. They won.
Now we're doing the same. Finally.
The free market didn't build America's rare earth supply chain. The free market gave it to China.
Now the government is taking it back.
Is it risky? Yes. Government investments often fail. Bureaucrats make bad decisions. Politics gets in the way.
But doing nothing is riskier. Letting China control our supply chain is riskier. Losing the technology war is riskier.
Trump understands this. He's taking the risk. He's making the bet. He's playing to win.
Vulcan and ReElement are small companies. Startups. Unproven.
But they're American. They're here. They're building.
With $1.4 billion, they can scale. They can compete. They can challenge China.
That's the goal. Not to beat China overnight. But to build an alternative. To create options. To break the monopoly.
The Real Reason Taxpayers Win When Government Takes Equity
The Defense Department gets warrants. Commerce gets equity. They're not just lenders. They're owners.
If these companies succeed, the government profits. The taxpayers profit. America profits.
If they fail, we learn. We adjust. We try again.
This is how you compete in the 21st century. This is how you win the supply chain war.
China isn't going away. They're still the biggest player. They're still the dominant force.
But they're not the only player anymore. America is back in the game.
Rare earths are the new oil. Control rare earths, control the future.
China figured that out decades ago. We're figuring it out now.
Better late than never.
The $1.4 billion deal is a signal. To China. To the world. To American companies.
America is investing. America is building. America is competing.
Take care. The supply chain war is just beginning.
Robert Kiyosaki
Editor, Money Power and Profit
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