As the United States and China begin imposing tit-for-tat tariffs upon tens of billions of dollars’ worth of traded goods, America has swept one of its own national security vulnerabilities into the mix: rare-earth elements (REE). The Trump administration has added rare earths and cobalt to its retaliatory tariff list. REEs, as well as other critical minerals like cobalt and lithium, are necessary ingredients for advanced clean technologies, particularly in the defense and clean energy sectors. Why rare-earths were included is unclear, but the United States is highly reliant on China for those raw materials.

The White House has correctly identified America’s dependency on China as a vulnerability, but enacting tariffs will only further limit supply available to the U.S. Instead, the United States should diversify its mineral imports away from China, increase supply by promoting domestic production and reduce demand by investing in alternatives and substitutes to REE-intensive technology.

China’s Power Play

In 2011, the National Development and Reform Commission, China’s economic planning body, identified the development of the rare-earth elements as a strategic resource. Four years later, the Ministry of Industry and Information Technology released its five-year plan for REEs, setting ambitious production and market-share goals for the domestic industry to meet by 2020.

China’s interest in critical minerals is tied to its larger ambitions in the global clean energy trade. Nearly all clean energy products—from solar panels to electric vehicles—require considerable amounts of REEs, as well as lithium and cobalt. Because of the myriad benefits these products provide, from zeroing out emissions to energy independence, demand for clean energy technologies will skyrocket in coming decades: Countries around the world are expected to invest $8.4 trillion in wind and solar alone by 2050. To accomplish this, 1,291 gigawatts of battery storage will be added to the grid during the same period.

In other words, today’s global clean energy market is small relative to its potential. Already the world’s largest clean energy manufacturer, China is preparing for market growth. The Chinese government called last year for its battery makers to double their capacity by 2020 and start investing in production facilities overseas.

Recognizing the opportunity to control an even larger market, China is heavily investing in access to rare earth minerals, monopolizing materials critical to the future of the global clean energy trade.

Already, more than 80 percent of the world’s rare-earth elements are extracted in China. But the Chinese government isn’t done—they have higher ambitions for REEs. By 2020, China wants to increase domestic REE production by 15 percent annually while also decreasing the proportion of primary raw materials meant to be exported from 57 percent down to 30 percent. Beijing’s intention to control the outward flow of REEs would create bottlenecks limiting the ability of non-Chinese companies to manufacture their products outside of China.

As a result of fast-paced growth in the clean energy sector, cobalt shortages are already expected by the early 2020s. If scarcity comes to bear for any critical mineral, Chinese clean energy firms will be the last to suffer globally.

Extracting the Elements

The “rare” in REE is a misnomer—while the elements aren’t as rare as precious metals, they can be hard to extract and refine and are often found in unstable regions, increasing their cost. The supply of lithium and cobalt, other crucial elements in batteries that China also hopes to monopolize, are also limited and can be hard to extract.

Besides reducing its rare-earth elements exports and increasing domestic production, China is also snapping up critical mineral access outside of its own borders, focusing on metals such as lithium, cobalt, nickel and copper—all essential elements in producing batteries.

While China mines most of the world’s REEs, the country only holds about one-third of the remaining reserve and is less dominant in the mining of other critical minerals. China only produces 7 percent of the world’s lithium, holding only 20 percent of recoverable reserves.  Beijing also has less of a firm grasp on production of cobalt, which is rarer. Roughly 60 percent of all cobalt is mined in the Democratic Republic of the Congo, which holds half of economically recoverable reserves globally. Likewise, countries in southern and eastern Africa offer some of the greatest potential for REE extraction. Unlike the U.S., China has fewer qualms about investing in these mines, where human trafficking and child labor have been identified.

Mining firm China Molybdenum announced in 2016 it was buying the Tenke mine in the largest private investment ever made in the DRC. Tenke is one of Africa’s largest copper miners and holds major cobalt reserves. In 2007, two state-owned companies, Sinohydro Corporation and China Railway Construction Corporation, signed a minerals-for-infrastructure deal, allowing them to gain access to large reserves of copper and cobalt for the price of a few roads and hospitals.

Compounding this, Tianqi Lithium, a major Chinese firm, is buying up lithium assets abroad. The firm already owns 51 percent of the world’s largest hard rock lithium mine at Greenbushes in western Australia, and is currently investing in a plant to convert the mine’s output into battery-grade lithium.

Tianqi is also aggressively bidding for a Chilean company, SQM, that already produces more than 20 percent of global lithium supply and could soon quadruple its output. Together, the two would have 70 percent of the world’s lithium market, according to the petition’s estimates.

It will be exceedingly hard for America to maintain access to critical minerals from other countries if Beijing successfully acquires these sources first.

America’s Kryptonite

While China has been barreling ahead in its quest to dominate REEs, the United States has only become more dependent on REE imports—rare earths were not mined at all in the U.S. in 2017, with China supplying 78 percent of imports in between 2013 and 2016. These elements are necessary to manufacture not only wind turbines and solar panels, but also cruise missiles and stealth aircrafts. Top officials in the Trump administration have already highlighted U.S. dependence on imported rare-earth elements. Testifying to Congress on the worldwide threats to the United States, then-CIA Director Mike Pompeo highlighted the need for the U.S. to develop a method to reduce our dependence. China once before reduced its REE exports to exact political leverage. In 2010, China reduced its overall exports by 40 percent, and embargoed Japan amid a territorial dispute. Japan ultimately folded. Illegal mining in China ultimately blunted Beijing’s embargo, but a second trade war over REEs would likely be more successful. The Chinese government has been cutting down on corruption, exerting tighter control on regional mines, while maintaining a ban on foreign investment in rare earth mining.

By holding the largest, cheapest reserves, China could artificially limit supply and move prices as Saudi Arabia and OPEC do with oil, even though the cartel does not produce most of the world’s oil. While no one country or cartel can threaten to cut off the entire world’s oil supply—the 1973 embargo proved just that—OPEC still maintains an outsized influence in the market. At its current pace, Beijing could achieve a similar role in the global clean energy trade.

Refining a Solution

As China’s use of economic coercion for economic and political gain continues, the United States should take this vulnerability seriously as the clean energy sector increasingly represents more of the American workforce, economy and energy production.

The administration should listen to trade associations when they ask for the critical materials to not be included on the list of tariffs. Furthermore, China has taken a stronger stance against coal mining reflective of its leadership in the global movement on climate action. However, within its own borders, China seems to be less receptive to local protests by residents who live near rare-earth mining operations. U.S. officials should highlight this hypocrisy in international forums to countries eager to work with China based on new climate leadership.

Congress should also take action by passing the Rare Earth Element Advanced Coal Technologies Act, which appropriates money for the assistant secretary for fossil energy to create a program to develop advanced refining and extraction techniques to make more domestic REE deposits economically viable and to identify and mitigate disruptions to the global REE supply chain. However, the bill should also allow for the U.S. Geological Survey to provide insight on domestic REE supplies and vulnerabilities.

Congress can also step up funding for the Department of Energy’s Critical Minerals Institute, allowing it to invest more in research and development, stand up for more prize competitions, and initiate private-public partnerships with companies to develop batteries that use less critical minerals or eliminate them altogether. Developing more advanced techniques to recycle used or faulty batteries could also offset a significant portion of American demand. Lastly, the U.S. can reasonably ease restrictions for mining critical minerals on public lands to jumpstart domestic production.

In the clean energy economy of the future, critical minerals will be just as essential—and geopolitical—as oil is today. To avoid making the same mistake twice, the U.S. should preemptively its own clean energy independence.