China’s Rare Earth Export Threat Could Trigger COVID-Level Economic Shock to U.S.
The U.S. economy faces a potential crisis mirroring the initial COVID-19 downturn if China enforces restrictions on rare earth mineral exports. These elements are vital for defense systems, automotive manufacturing, and consumer electronics—sectors where China commands near-total market dominance.
Oxford Economics warns that severing rare earth supplies could slash GDP growth while catapulting inflation beyond 10%. The analysis emerges as Washington and Beijing exchange threats of tariffs and export controls ahead of a critical Trump-Xi summit in Seoul.
Though both nations may be deploying negotiation tactics, the standoff carries existential risks for global tech supply chains. Rare earth shortages WOULD particularly destabilize industries reliant on high-performance magnets and semiconductors—components embedded in everything from electric vehicles to missile guidance systems.
