Highlights

• Alvin Camba argues U.S. semiconductor export controls are renewable leverage, while China's rare earth weapon burns hottest initially then fades as Western allies adapt through financing and industrial policy.
• China's rare earth advantage isn't truly single-use—licensing friction and selective enforcement create chronic supply uncertainty while the West needs a decade to build competitive separation and magnet-grade supply chains.
• Rare earths are becoming statecraft infrastructure where pricing benchmarks, licensing levers, and midstream control converge—creating portfolio risks across EVs, drones, robotics, and defense with no instant supply alternatives.

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War on the Rocks’ Alvin Camba argues (opens in a new tab) that U.S. semiconductor export controls are a renewable form of power, while China’s rare earth leverage is a single-use weapon that burns hottest at the start and then fades as the West adapts.

The piece today rests on a clean premise: choke points matter less than the ability to sustain them over time—through durability, replaceability, precision, feedback loops, and sustainability.

It also leans on a concrete 2025–2026 plot device: a U.S.–China escalation followed by a one-year pause, implying both sides are simply catching their breath before the next round.

Where the Author Nails the Supply Chain Reality

On rare earths, Camba correctly captures the basic mechanics: coercion triggers price spikes, price spikes unlock financing, and financing accelerates industrial policy in allied states. That pattern is not theory—it’s the post-2010 lesson. It is also accurate that China’s pricing system is increasingly centralized and institutionalized; Northern Rare Earth’s move to reference Baotou Rare Earth Exchange daily pricing for long-term agreements is a real signal of market-making intent. And the “new capacity” examples aren’t pure handwaving—Canada’s conditional backing for samarium/gadolinium refining in Kingston is a tangible (if narrow) midstream step.

The Soft Underbelly: Time, Heavy REEs, and the Magnet Trap

Here’s the uncomfortable part the essay underplays: rare earth substitution is not a light switch. Permitting, separation scale-up, qualification cycles, and magnet-grade consistency take years, as Rare Earth Exchanges™ has chronicled—likely a decade—especially for dysprosium/terbium-heavy supply chains where chemistry, feedstock, and byproduct economics are unforgiving.

Calling China’s leverage “single-use” flatters Western timelines and is a frequent point of view observed in Western media. Yet, Beijing doesn’t need a total ban; licensing friction and selective enforcement can create chronic uncertainty—death by paperwork—while the West is still building its first truly competitive separation-and-metal stack. That is not a burn; it is a slow choke with a long tail.

What This Means for Investors Watching Rare Earths

The notable signal is not “rare earths are weak.” It is that rare earths are being recast as statecraft infrastructure: pricing benchmarks, licensing levers, and midstream control are merging into one toolset.

Semiconductors may compound faster, but rare earths can still ambush portfolios—because magnets sit at the crossroads of EVs, drones, robotics, and defense, and there are no “instant factories” for qualified supply.

Citations: War on the Rocks (Jan 5, 2026); Reuters (Oct 30, 2025); Morrison Foerster (Nov 13, 2025); Canada NRCan (Oct 31, 2025); Ucore release (Oct 31, 2025); Metal.com report on Northern Rare Earth pricing shift (Jan 6, 2025).

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