So, China has put export controls on rare earths.
People think “well, we’ll just mine them ourselves” but it often isn’t that simple. Gallium is refined as part of the process of aluminum smelting, for example, and the US has no aluminum smelting industry left.
More generally speaking the world is unfolding as I predicted: it’s splitting into two trade blocs, a cold war is developing (the Syrian “uprising” is a cold war maneuver) and the US is trying cannibalize its satrapies: that’s what Trump’s tariffs on allies are about.
Since the 50s it was deliberate American policy to offshore industry to its allies, especially South Korea, Japan and Taiwan, but also to Europe and the Anglosphere to some extent. Now it wants to pull that back in. This has been especially noticeable, of late, in Germany, where heavy industry is shutting down and much of it is moving to the US.
The problem, of course, is that China’s cost structure is lower and they are pulling ahead technologically. The Chinese believe in technology in a way the West hasn’t since the 60s—it’s good to them. They want more robots, more drones and more automation. They’re not scared of automation taking jobs, they associate rapid technological advancement with prosperity.
The problem with bringing industry back to the US isn’t just cost-structure, it’s the so-called competency crisis and the sparseness of the vast numbers of small industrial suppliers. The ecosystem which supports and allows rapid re-industrialization doesn’t exist in the West any more. A simple example is that almost all of the world’s machine tools and basic electronics which are needed to do everything else are produced in China (with a small machine tool industry barely surviving in Germany.)
The West is going to have increasing problems with resources, as well. Most of the “South” would rather do business with China, for reasons we’ve discussed ad-infinitum. As the US cannibalizes its allies it will also have difficulty with trade: if Europe’s poor and everyone else would rather buy Chinese, who are you going to sell to?
Trump’s tariff plans aren’t exactly stupid, but they require real industrial policy at the same time and managing relationships with trade partners, including partners the US insists on treating as enemies, and Trump isn’t up for that, any more than Biden was.
So America will decline, but will decline less fast than its allies and the world will split into two competing blocs. Only this time the “Western” bloc will be the weaker, less technologically advanced one.