By the time he welcomes Chinese President Xi Jinping to Mar-a-Lago this week, President Trump will have a briefcase full of notes about what topics he should raise. Many take just two words: North Korea, fair trade, currency manipulation, patent theft, cyber assault. Two words he should utter, but probably won’t: rare earths.
That’s because Trump, businessman par excellence, knows he has a weak hand.
Trump has already signaled via Twitter that he expects his meeting with Xi to be difficult. That is like telling an employee “You are underperforming,” instead of “You’re fired.”
The U.S. has little leverage over China’s economic support of North Korea, whose madman leader Kim Jong Un could test a nuclear device to mar the Sino-U.S. summit.
America’s nearly $350 billion trade deficit may be partly the result of Beijing’s currency manipulation. But while there may be room for a frank discussion, Americans want to pay the lowest possible prices for their consumer goods. And right now, those come from China.
Whether Trump can get a meaningful promise from Xi to stop its cyber assault on crucial databanks like the Pentagon, U.S. banks and government employees’ records depends on whether the Chinese leader will even admit to such crimes. And Xi needs only point to Russia’s own hacking of U.S. software and shrug.
But where Trump could take a serious step in his campaign pledge to return jobs to America is the issue of rare earths. Those are the 17 minerals and elements that are essential to making advanced military aircraft, rocket-guided missiles, GPS systems and even the iPhones that everyone at the summit will be toting.
In the late 20th century, the U.S. was the world’s leading producer of rare earths, ensuring our military and civilian manufacturers with a secure supply of the crucial materials.
Gradually, U.S. companies sent rare earth mined in the United States to China for processing, and, to ensure quality control, gave away to Chinese producers the technological secrets that had been developed in America.
Not surprisingly, China, which also has large rare earth deposits, took the technology being offered for free, improved on it, and quickly outstripped U.S. production. Since it pays little attention to the ecological damage done by strip-mining and smelting, it can undercut competitors’ prices.
China now produces 95 percent of the world’s rare earths. U.S. production: zero. Our military and commercial manufacturers are 100 percent dependent on China for rare earths. And the American jobs created by rare earth mining and separation: gone.
Here’s Bellwether’s advice: Trump need not raise the topic with Xi. Instead, while the Chinese leader is in the room, the president should turn to the top Pentagon hand seated at the summit table and mention casually, “By the way, we’re going to start mining and producing our own rare earths again. And soon.”
President Xi has won accolades for his cool public demeanor and unflappability in dealing with foreign leaders. It would be interesting to see how he’d react to those words. And Trump, a new president who needs to show results soon, could chalk up a rare win.