Robert Lighthizer on 60 minutes, 2/2/2025

 

https://www.youtube.com/watch?v=KwUG2bOHqFA

"China wants to be number one."

So does America.

"America needs to have the strongest military and economy and technology to prevent wars."

And yet they start (and lose) wars all over the place. How many wars has China started?

"A tariff is a tax on a foreign country".

No, a tariff is a tax on America. And this not just on consumer goods which we can cut back on like shoes. Although it seems unAmerican to say "buy less". Tariffs ironically raise the cost of building new factories because a lot of the machines are also made in China. This is a side of the economy many don't see but it's absolutely real and important. 60 minutes had a good example with the steel tariffs helping steel makers but hurting steel buyers more. Created 1000 jobs in steel but cost 75,000 jobs.

The industrial revolution was a long process of inventing machines to build machines. China started late because of many things holding them back but about 30 years ago, they started running free and fast. America decided to take a break and now they have years of work to try to catch up to China.

But if you just look at the raw numbers of relative population and STEM majors, it favors China greatly.  1411 million vs 340 million.

Trump thinks America is better and if we're not winning, it's due to cheating. And he has collected some poison arrows to argue for that, like stealing technology. But if America invented the technology, why don't *they* do more with it? So then the excuse is slave labor. Yes, Chinese work hard. Is that a bad thing? Are we going to fight a war for the right to work less?

Trump is trying to impose a ludicrously one-sided unfair deal on China. I do not think China will accept it.

What is the authority behind the Disparate Impact doctrine?

The authority for DI is a part of the Constitution (14th a) written by the winner of a war (the North) and as such, is as foundational a rule as possible.

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Fourteenth and Fifteenth Amendments: Congress’s authority to enact disparate impact provisions stems from its enforcement powers under Section 5 of the Fourteenth Amendment (equal protection) and Section 2 of the Fifteenth Amendment (voting rights).

Original Authority: The foundation for disparate impact lies in Title VII of the Civil Rights Act of 1964 (42 U.S.C. § 2000e et seq.), which prohibits employment discrimination based on race, color, religion, sex, or national origin. While Title VII did not explicitly mention disparate impact, its language prohibiting practices that "adversely affect" protected groups laid the groundwork.

Judicial Interpretation: The U.S. Supreme Court first recognized disparate impact in Griggs v. Duke Power Co. (1971), holding that Title VII proscribes "not only overt discrimination but also practices that are fair in form, but discriminatory in operation" unless justified by business necessity. This interpretation established that intent was not required for a Title VII violation if a practice disproportionately harmed protected groups.

Original Act: The Voting Rights Act of 1965 (52 U.S.C. § 10301 et seq.) aimed to eliminate discriminatory voting practices, particularly those affecting racial minorities. While primarily focused on intentional discrimination, its enforcement mechanisms set the stage for disparate impact claims.

1982 Amendments: In City of Mobile v. Bolden (1980), the Supreme Court held that Section 2 of the Voting Rights Act required proof of discriminatory intent, limiting its scope. In response, Congress amended Section 2 in 1982 to explicitly incorporate a disparate impact standard, stating that a violation occurs if a voting practice "results in" a denial of rights on account of race or color, regardless of intent. This amendment codified disparate impact for voting rights, overcoming judicial restrictions.

China's foreign policy

Traditional Chinese culture has historically approached foreign relations through a lens of hierarchical cosmology, centered on the concept of the "Middle Kingdom" (Zhongguo). This worldview positioned China as the cultural and political core of the world, with the emperor as the "Son of Heaven," holding a divine mandate to rule. Foreign relations were often framed within the tributary system, where neighboring states and distant polities acknowledged China's superiority by sending envoys, offering tribute, and receiving imperial gifts in return. 

This system, rooted in Confucian principles of harmony and propriety, was less about territorial conquest and more about establishing a network of symbolic loyalty and mutual benefit. For example, the Tang (618–907) and Ming (1368–1644) dynasties maintained extensive tributary networks, with states like Korea, Vietnam, and even distant Central Asian kingdoms participating, reinforcing China's cultural prestige without direct governance.

However, this approach was pragmatic rather than rigidly ideological. Chinese dynasties adapted their foreign relations based on power dynamics and practical needs. When faced with militarily formidable neighbors, such as the nomadic Mongols or Jurchens, China often employed diplomacy, marriage alliances, or strategic trade to maintain stability. 

The Han dynasty (206 BCE–220 CE), for instance, used the "heqin" policy, sending princesses to marry Xiongnu chieftains to secure peace. The Song dynasty (960–1279), constrained by powerful northern neighbors like the Liao and Jin, negotiated treaties and paid tributes to avoid conflict, reflecting a flexible balance between Confucian ideals and realpolitik. This adaptability ensured that cultural superiority was maintained in rhetoric, even when military or economic realities demanded compromise.

The legacy of traditional Chinese foreign relations is evident in its emphasis on soft power and long-term relationship-building. Unlike Western imperialist models that often prioritized territorial expansion, China's approach leaned on cultural assimilation and economic integration. Foreign envoys were exposed to Chinese art, literature, and governance, subtly encouraging admiration and emulation. The Silk Road, for instance, facilitated not only trade but also the spread of Chinese cultural influence across Asia and beyond. 

However, this system faced challenges when encountering cultures or powers that rejected the Sinocentric worldview, such as during interactions with European colonial powers in the 19th century. The clash between China's traditional diplomatic framework and Western notions of equal sovereignty marked a turning point, forcing adaptations that continue to shape China's modern foreign policy.

domestic rare earth industry by Grok

Building a domestic rare earth industry to offset China’s export controls and rival its refining technologies is a complex challenge requiring significant time, investment, and coordinated effort. Below, I outline the estimated timeline, investment needs, and key considerations based on available data and expert analyses.

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Timeline: 6–12 Years for Significant Independence

Developing a robust U.S. rare earth industry, including mining, refining, and downstream manufacturing, would likely take 6–12 years to achieve meaningful independence from China, depending on the scale and urgency of implementation. This timeline accounts for the following stages:

1. Permitting and Infrastructure Development (2–5 years):
   • New mines and processing facilities require environmental permits, which can take 2–3 years even with streamlined processes.
   • Building refining facilities, such as solvent extraction or novel processing plants, takes 3–5 years due to complex engineering and regulatory compliance.
   • Example: The Mountain Pass mine, despite being operational, sent 98% of its raw materials to China in 2019 due to limited domestic refining capacity, highlighting the time needed to scale up processing.
2. Scaling Refining Capacity (3–7 years):
   • Refining heavy rare earths (e.g., dysprosium, terbium), which China dominates, requires developing advanced separation technologies. Current U.S. capabilities are early-stage, with no commercial heavy rare earth separation as of 2025.
   • Facilities like MP Materials’ planned heavy rare earth processing plant in Texas, funded with $35 million from the Pentagon, are not expected to be fully operational until 2027 at the earliest.
   • Novel refining technologies (e.g., RapidSX by Ucore Rare Metals) aim to be faster and cleaner but are not yet commercial and may take 5–7 years to scale.
3. Achieving Full Supply Chain Integration (6–12 years):
   • The Department of Defense’s goal is a complete mine-to-magnet supply chain by 2027, but this is optimistic and limited to defense needs.
   • Commercial-scale production to meet broader industrial demands (e.g., electric vehicles, wind turbines) requires 10–20 years for new plants to become fully operational, as seen with historical delays at Mountain Pass.
   • Workforce development and technological innovation add further time, as the U.S. lacks sufficient mining engineers and rare earth patents compared to China’s 25,911 (vs. 9,810 for the U.S. as of 2018).
4. Emergency Measures for Faster Progress:
   • With aggressive policy (e.g., invoking the Defense Production Act, streamlining permits, and offering long-term procurement contracts), the U.S. could achieve partial independence in 6–8 years, focusing on critical defense applications.
   • However, full decoupling from China’s 90% control of global rare earth processing and 100% of heavy rare earth refining would still take closer to a decade.

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Investment: $15–50 Billion

The financial investment needed to build a U.S. rare earth industry capable of rivaling China’s dominance is estimated at $15–50 billion over the next decade, depending on the scope and speed of development. This includes:

1. Mining and Refining Infrastructure ($10–20 billion):
   • Building 5–10 new refining facilities could cost $5–10 billion, with each facility requiring $1–2 billion.
   • Example: NioCorp’s Nebraska mine requires an $800 million loan, and MP Materials has invested nearly $1 billion since 2020 without yet processing heavy rare earths.
   • The Round Top deposit in Texas, estimated at $300 million for a mine and processing facility, illustrates the high capital costs for even a single project.
2. Research and Development ($2–5 billion):
   • Developing refining technologies to rival China’s solvent extraction (which processes 90% of global rare earths) requires significant R&D investment.
   • Novel technologies like molten salt electrolysis or electrochemical methods (e.g., Apple’s recycling process) are promising but costly to scale.
   • The U.S. Department of Energy’s Ames Laboratory and other institutions need funding to close the patent gap with China.
3. Workforce and Environmental Compliance ($1–5 billion):
   • Training a skilled workforce, including metallurgists and mining engineers, could cost $500 million–$1 billion, addressing the decline in U.S. mining expertise.
   • Environmental regulations, such as the EPA’s Superfund designation for rare earth waste, add $2.5 million per acre in cleanup costs, deterring investors and requiring subsidies.
4. Downstream Manufacturing and Stockpiling ($2–10 billion):
   • Building magnet production facilities (e.g., MP Materials’ Texas factory) and other downstream capabilities could cost $2–5 billion.
   • Stockpiling critical rare earths for defense and industry, as recommended by experts, may require $1–5 billion to buffer against supply disruptions.
5. Allied Supply Chains and International Investments ($5–10 billion):
   • “Friendshoring” with allies like Australia, Canada, and Brazil requires investments in their mining and processing projects, potentially $5–10 billion.
   • Example: The U.S. is funding graphite mining in Mozambique and discussing strategic mineral processing in Australia.

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Key Considerations and Challenges

1. China’s Dominance:
   • China controls 60% of global rare earth mining, 85–90% of refining, and 100% of heavy rare earth processing (with minimal output from Vietnam).
   • Its strategic policies since the 1980s, including export quotas and low-cost production, have created a near-monopoly, making it difficult for the U.S. to compete economically.
   • Recent export controls (April 2025) on seven heavy rare earths (samarium, gadolinium, terbium, dysprosium, lutetium, scandium, yttrium) underscore the urgency of U.S. action.
2. Technological Gap:
   • China’s solvent extraction process is efficient but environmentally damaging, giving it a cost advantage ($32/kg for neodymium vs. $58/kg for U.S. recycling methods).
   • The U.S. must innovate cleaner, faster methods (e.g., Ucore’s RapidSX or Saskatchewan Research Council’s technology) to compete, but these are not yet commercially viable.
3. Environmental and Regulatory Barriers:
   • Rare earth processing produces radioactive waste (thorium, uranium), triggering strict EPA regulations like 10,000-year radiation containment requirements, which increase costs.
   • The 1980 U.S. Nuclear Regulatory Commission amendment classifying rare earth byproducts as nuclear source material halted domestic production, a policy China exploited.
4. Economic Viability:
   • Investors are hesitant due to high capital costs, long lead times, and China’s ability to suppress prices by flooding markets.
   • Government subsidies and procurement guarantees (e.g., for defense contracts) are critical to attract private investment.
5. Geopolitical Risks:
   • China’s export controls, as seen in 2010 against Japan and 2025 against the U.S., can cause price spikes and supply shortages, impacting defense and tech sectors.
   • The U.S. military, reliant on rare earths for F-35 jets, missiles, and drones, faces immediate vulnerabilities.

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Strategies to Accelerate Progress

To offset China’s export controls and rival its refining capabilities, the U.S. could adopt the following measures:

1. Federal Critical Mineral Processing Initiative:
   • Establish a centralized program to fund refining facilities, streamline permits, and prioritize states with optimal conditions (e.g., Texas, California).
   • Use the Defense Production Act to subsidize private sector efforts, as done in 2019 and proposed in 2025.
2. R&D Investment:
   • Fund national labs (e.g., Ames Laboratory) and startups like Ucore and Phoenix Tailings to develop cleaner, cost-competitive refining technologies.
   • Encourage public-private partnerships to scale recycling initiatives, which could recover 95–98% pure rare earths from electronic waste.
3. Workforce Development:
   • Invest in training programs to address the shortage of mining engineers and metallurgists, potentially modeled on China’s 863 Program, which trained 12,000 specialists.
4. International Cooperation:
   • Strengthen alliances with Australia, Canada, and Brazil to secure alternative supply chains, leveraging their rare earth deposits and processing initiatives.
   • Expand the Minerals Security Partnership to diversify global supply.
5. Stockpiling and Recycling:
   • Build strategic reserves of heavy rare earths to mitigate short-term disruptions, as recommended by CSIS and others.
   • Scale recycling efforts, like Apple’s robotic disassembly lines, to recover rare earths domestically.

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Conclusion

The U.S. could achieve partial rare earth independence in 6–8 years with emergency measures, focusing on defense needs, but full decoupling from China’s dominance would take 10–12 years and require $15–50 billion in investment. This includes building 5–10 refining facilities, advancing R&D, training a workforce, and securing allied supply chains. Challenges like environmental regulations, technological gaps, and China’s cost advantage necessitate aggressive federal policies, including subsidies, streamlined permitting, and international cooperation. Without sustained commitment, the U.S. risks prolonged vulnerability to China’s export controls, threatening national security and economic resilience.