US Moves to Break China's Rare Earth "Chokehold" on Critical Minerals

Testifying on the administration's fiscal year 2027 budget, Lutnick said rare earth minerals -- essential for semiconductor manufacturing and advanced technologies -- have become a strategic vulnerability. "Critical minerals have been weaponized by China, who has a dominant position, and we need to break that chokehold," he said. The Department of Commerce, he added, is working closely with the Department of War, the Department of Energy, the Department of the Interior and the White House to align resources and policy responses.

At the center of that coordination is the CHIPS office -- a team within the Department of Commerce set up under the CHIPS and Science Act of 2022. Originally created to oversee the implementation of the $52.7 billion CHIPS Act, which aims to boost domestic semiconductor manufacturing and research, the office has expanded its mandate to include supply chain resilience for critical inputs like rare earths. "It's logical that they would be there and they are the team that coordinates that within the Department of Commerce," Lutnick said, describing the group as "an exceptional team of deeply capable people." The White House has also convened a broader critical minerals task force that meets regularly, with a designated official leading the cross-agency effort.

Lutnick's remarks come as Washington seeks to reduce reliance on China, which controls a significant share of global rare earth mining and processing. Rare earth elements are vital for producing semiconductors, electric vehicle batteries, defense systems and quantum technologies. Disruptions in supply have already raised concerns across industries, prompting bipartisan calls for onshoring and diversification of sourcing.

Lutnick said that the role of government is shifting as private companies now invest heavily in the sector. "I think what you'll see is the CHIPS office in R&D will do a broad-based investment in American quantum companies in order to help those companies achieve American dominance in quantum," he said. The plan, he explained, is to move from government-led exploration to supporting commercial innovation while the National Institute of Standards and Technology (NIST) continues to develop technical standards and coordinate efforts across agencies.

NIST, he noted, remains critical in rationalizing quantum research and ensuring interoperability as the technology matures. The stakes are high: fully developed quantum computing on satellites, for example, could potentially detect submarines at depth -- a capability that could undermine U.S. strategic positioning if mastered by adversaries like China.

On rare earths, Lutnick emphasized that the multi-agency approach is moving "swiftly" and is focused on leveraging collective resources to secure supply chains. The strategy combines domestic investment, partnerships with allied nations and targeted R&D funding through the CHIPS office.

The CHIPS Act itself was designed to rebuild America's semiconductor ecosystem after decades of offshoring, with provisions for grants, tax credits and research support.

- ANI