Access to Critical Minerals is the Achilles’ Heel of Trump’s AI Ambitions

On June 11, the Trump administration announced a 55% tariff on Chinese imports. This came as a dramatic reversal from the initially proposed 145% rate proposed on “Liberation Day.” The reason: to restore America’s access to critical and rare earth minerals.

Beijing had responded to the “Liberation Day” tariffs by halting exports of rare earth metals to the US. The move sent shockwaves through American and European industries, especially the automobile and defense manufacturing sectors. This months-long trade war revealed just how dependent the US is on China for these critical resources.

Rare earths are a group of 17 elements indispensable to many advanced technologies, including artificial intelligence (AI). For example, terbium and dysprosium are vital to producing 3D scanning devices used in autonomous vehicles and robotics. Other critical minerals, including gallium and germanium, are equally important, especially for AI hardware.

Critical minerals are used in every layer of the AI stack. At the most fundamental level, advanced semiconductors require gallium compounds. Then, in data centers where AI models are trained, dysprosium prevents data storage devices from overheating. Lithium-based batteries store energy long enough to power autonomous vehicles and robots.

China dominates the production of critical minerals and rare earths. It controls 98% of the world’s supply of gallium and processes nearly 90% of all rare earths. The US produces no gallium and less than 2% of the world’s germanium. These minerals are key ingredients in US defense systems, making supply chain vulnerabilities a serious threat to US national security.