Rare earth elements: A strategic tool amid US–China rivalry – Rabobank

US Rare Earth Reserves and China's Strategic Advantage

According to RaboResearch, the United States may have only enough rare earth materials in reserve to last approximately two months following depletion caused by the Iran conflict. This limited stockpile could provide China with considerable negotiating power. The analysis indicates that the availability of rare earths may influence how long the US can sustain military actions against Iran and could restrict Washington’s strategic choices, potentially increasing the likelihood of further escalation or unconventional tactics.

Limited US Supplies and China’s Negotiation Leverage

The report notes that, should reserves be exhausted during this conflict, the US would be left with just a couple of months’ worth of rare earths. In such a scenario, discussions between US leaders and China’s President Xi Jinping would likely be dominated by concerns over these critical supplies, underscoring their strategic significance.

In response, the US might consider escalating tensions as a means to force de-escalation, signaling to China that disruptions in rare earths could further destabilize already volatile energy markets.

Additionally, some analysts believe that, despite China’s geopolitical ties with Iran, Beijing prioritizes stability and uninterrupted oil flows. While this stance could ultimately benefit both global energy markets and US-China relations, it also introduces the potential for unpredictable developments and market volatility. This remains a significant risk factor to monitor.

(This content was produced with the assistance of artificial intelligence and subsequently reviewed by an editor.)