Thread by @ndcarson

A 🧵🧵🧵on Outsourcing and Rare Earths:

Outsourcing heavy industry to China didn't just destroy American jobs, it also imperiled US national security. This is because when you outsource one industry, you end up outsourcing industry clusters due to natural synergies that emerge. 1/n

China produces 54% of the world's steel, and as a consequence, 56% of Chinese rare earths are a byproduct of iron ore from the Inner Mongolia Autonomous Region. China controls 60% of rare earth mining and 90% of refining operations.

This is due to a combination of China's disregard for environmental regulations and how the state banking sector subsidizes Chinese industry in the form of "loans" that are never repaid. 2/n

The four elements that are most important are Neodymium (Nd), Praseodymium (Pr), Terbium (Tb), and Dysprosium (Dy) as these are the elements that are used to create neodymium magnets.

Neodymium magnets are critical materials in the production of EVs, solar panels, and wind turbines. 3/n

Since China has been able to monopolize the refining of rare earths, that gives it natural synergies in the production of EVs, solar panels, and wind turbines. China is now engaging in a monopolistic export strategy to monopolize global markets in these products as well. 4/n

Chinese domination of rare earth supply chains imperils US national security because neodymium magnets are also critical materials in precision guided munitions, attack subs, F-35s, and other weapons platforms.

Without rare earths, it is impossible to product modern weapons systems. 5/n

China is well aware of the synergies that emerge from heavy industry and arms production. Hosting just enough industry domestically to keep domestic arms producers in business does not provide latent ramp up capabilities in times of emergency. 6/n

It is impossible for the US to ramp up its production of ships, PGMs, and other war materials without also ramping up domestic heavy industry and the extraction and refining of rare earths.

While the US accounts for 12% of global rare earth mining, it is still woefully lagging in the refinement category. 7/n

While there are multiple refinement projects underway, the US must continue to promote the extraction of Neodymium (Nd), Praseodymium (Pr), Terbium (Tb), and Dysprosium (Dy). It must also promote the domestic extraction of yttrium, a critical material in sensors and ceramics for aviation. 8/n

Outsourcing may have made goods "cheaper" and improved profit margins for Wall Street, but it has gutted the American middle class and literally built America's biggest geopolitical foe. Outsourcing has threatened US national security. 9/n

The resurgence of American industry requires that the US secure access to critical raw materials like rare earths. The first steps are the most difficult and the most costly, however, once an industry is established, synergies emerge to further develop industry clusters.

This is the core of the Trump Admin's industrial policy strategy. 10/*fin