No Mercy / No Malice: Rare Earths

As read by George Hahn. https://www.profgalloway.com/rare-earths/ Learn more about your ad choices. Visit podcastchoices.com/adchoices

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• 0:01Scott Galloway?

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• 0:48Speaker 01

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• 1:19Speaker 02

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• 1:49George Hahn?

  I'm George Han, and this is No Mercy, No Malice. In 1973, Americans learned a painful lesson after an OPEC embargo demonstrated the cost of energy dependence. A similar lesson is playing out today. China's stranglehold on rare earth mining and processing gives it enormous power to dictate global affairs. We can break China's stronghold, but to do so, we'll need to discover new reserves, innovate new production methods, and perhaps most challenging of all at this moment, work with our allies.

• 2:30George Hahn?

  Rare Earths.

• 2:35George Hahn?

  Last week, US forces entered Venezuela and arrested President Nicolas Maduro. Regardless of your politics, this was a serious flex from the best-performing organization in history: the US military. Army Delta Force and 160th Special Operations Aviation Regiment (Specialized Helicopters) accomplished in 35 minutes what Putin has been unable to accomplish in Ukraine in 35 months. But, like most Bond films, our overseas adventures begin strong but then come off the tracks. Ostensibly, the goal was to stop the flow of fentanyl into the US, but there is no flow.

• 3:18George Hahn?

  According to the DEA, Venezuela has nothing to do with smuggling fentanyl. Trump's real objective is oil. In a press conference announcing Maduro's capture, the president mentioned drugs just five times, while talking about oil 27 times. Like so many things with Trump, the Don Row Doctrine is a noxious cocktail of greed and stupidity, garnished with calcified ideas from the past. Oil still matters to the global economy, but launching a regime change for oil is like invading Costa Rica for sand.

• 4:00George Hahn?

  Venezuela's black gold is heavy crude. It costs upwards of $70 a barrel to extract oil you can sell for $58. The world power curve has been shaped by oil for decades, but a different resource is bending that curve. So, for a moment, let's ignore that masked government agents are murdering people in American cities, and talk about the new oil. By the way, America's very founding was an attempt to escape this type of state-sponsored depravity, but I digress.

• 4:40George Hahn?

  Rare earths is an umbrella term for 17 metallic elements. Despite the name, they aren't especially rare, just difficult to extract and refine. Like petroleum, which is a raw input for more than 6,000 products, rare earths find their way into a wide range of modern technologies, including smart devices, solar panels, medical imaging equipment, and vehicles, both electric and internal combustion. Also, similar to petroleum, rare earths are vital to US defense capabilities, from tanks and tomahawk missiles to satellites. Rand estimates an F-35 fighter contains more than 900 pounds

• 5:25George Hahn?

  of rare earth materials in its engines and electronics. An Arleigh Burke-class destroyer requires approximately 5,200 pounds, and a Virginia-class submarine uses about 9,200 pounds. The question isn't what do we need rare earths for, but what do we not need rare earths for? A: Nothing important. The idea that nations don't have friends, only interests, is a worldview variously attributed to Lord Palmerston, Charles de Gaulle, or Henry Kissinger. The maxim doesn't capture the idealism that sometimes drives American foreign policy,

• 6:09George Hahn?

  but it does sum up how statesmen explain the logic of sacrificing blood and treasure in the pursuit of national interests. A nation that secures its interests, oftentimes natural resources, controls its destiny. For the ancient Romans, salt was more than seasoning. It was the backbone of commerce. In Rubicon: The Last Years of the Roman Republic, historian Tom Holland views control of the salt trade as the key building block of Rome's early wealth and military dominance, noting that Rome's location was desirable in part because of its proximity to the salt pans at the mouth of the Tiber River.

• 6:53George Hahn?

  In SPQR: The History of Ancient Rome, historian Mary Beard argues that Rome's government saw salt as a strategic resource akin to how modern states view energy. Rome built roads to transport salt, in particular the Via Salaria, and even subsidized salt prices to preserve domestic order. In the 19th century, Peru held a near-monopoly on guano, bird shit, a critical input for fertilizer as well as gunpowder. In response, the US Congress passed legislation in 1856 authorizing the seizure of more than 100 guano islands.

• 7:37George Hahn?

  In How to Hide an Empire, historian Daniel Immerwarr notes that guano was so valuable that many called it "white gold." As Immerwarr writes, "It was the pursuit of this white gold that made the US an oceanic empire and laid the foundations for overseas territorial conquests to come." During World War II, Japan's push into Southeast Asia cut off 90% of the global supply of natural rubber, spurring the US to launch a program to mass-produce a synthetic alternative.

• 8:17George Hahn?

  Without rubber, America couldn't produce tires for trucks and planes, life rafts, oxygen masks, pontoon bridges, certain medical supplies, raincoats, boots, and thousands of other products necessary for waging war. In The Economic Consequences of US Mobilization for the Second World War, Alexander J. Field, professor of economics at Santa Clara University, argues redressing the loss of Southeast Asian rubber imports was more important than the Manhattan Project in making Allied victory possible.

• 8:55George Hahn?

  In 1973, Americans got a crash course in the geopolitics of oil when the OPEC nations flexed their economic muscle to undermine US support for Israel during the Yom Kippur War. The fallout from the embargo caused the US to reassess our dependence on Middle Eastern oil, leading to increased domestic production and a greater emphasis on energy efficiency. Beginning in 2019, nearly 50 years after OPEC's embargo, the US is now a net exporter of oil. Though we still import some oil, 52% comes from Canada and another 11% from Mexico. Notwithstanding the Don Ro doctrine,

• 9:40George Hahn?

  which can be summed up as "alienating allies and comforting enemies", the US oil supply is no longer vulnerable to exogenous shocks.

• 9:52George Hahn?

  If rare earths are the new oil, China is the new OPEC. Chinese mines supply nearly 70% of the ore from which rare earth elements are extracted and more than 90% of the refined materials. Meanwhile, the US imports 70% of its rare earths from China. This asymmetry is a strategic vulnerability. According to a 2025 report from the Center on Strategic and International Studies, China has demonstrated a willingness to weaponize rare earths. In 2010, for example,

• 10:35George Hahn?

  China cut off rare earth exports to Japan over a maritime dispute, threatening to halt its automotive production. Japan responded by importing more rare earths from Australia in the short term and ramping up domestic production long term. Since then, Japanese rare earth imports from China have fallen from 90% to 60%. Still too high, but low enough that Tokyo has options if Beijing restricts access.

• 11:10George Hahn?

  This week, China again banned the exports of rare earths to Japan over its support for Taiwan. But notably, the ban included a far broader category of goods, suggesting China's rare earth leverage over Japan has weakened.

• 11:29George Hahn?

  It's a different story for the US. In April, China retaliated against Trump's so-called reciprocal tariffs by restricting the export of seven types of rare earths. Trump folded, naturally, but even after reaching a deal in October to resume exports, the US remains at China's mercy. According to a recent Bloomberg report, continued restrictions on deliveries of raw materials hamstring US efforts to build domestic rare earth processing capacity. Meanwhile, the president's plans to secure alternative sources of rare earths would be laughable if they weren't so stupid, i.e. hurting others while hurting ourselves.

• 12:14George Hahn?

  We're threatening to seize Greenland from Denmark, a NATO ally, despite Greenland's rare earth deposits being low-grade and costly to extract. We also shook down Ukraine for rare earths, but that deal could take more than a decade to bear fruit as 40% of Ukraine's mineral resources are inaccessible due to Russian occupation. While we flounder, China dominates. As Deng Xiaoping famously said back in 1992, "The Middle East has oil. China has rare earths."

• 12:51George Hahn?

  In 2024, reports out of Wyoming suggested that the US had hit a rare earth motherload at Hallic Creek. Geo Husser, an outstanding influencer who focuses on geopolitics, believes Hallic Creek, with an estimated 2.3 billion metric tons of ore, 50 times China's reserves, will eventually break Beijing's stranglehold over rare earths. But according to Carl Friedhof, a fellow at the Chicago Council on Global Affairs, Hallic Creek is likely to net closer to 7.5 million metric tons of usable rare earth material after extraction and processing.

• 13:35George Hahn?

  Even using the lower estimate, that's enough to catapult the US from seventh to third place, just behind Brazil.

• 13:44George Hahn?

  Still, the objective is getting rare earths out of the ground and into the supply chain. Unfortunately, it takes American mining firms an average of 29 years to go from discovery to operations, putting the US next to last worldwide, just ahead of Zambia.

• 14:08George Hahn?

  China monopolized rare earths by providing capital to its leading firms, encouraging rare earth acquisitions abroad, banning foreign companies from buying domestic mines, and eventually consolidating its industry into a few giant players, giving it leverage over prices. In other words, China played the long game. According to a 2025 Carnegie Endowment for International Peace Analysis, both the Biden and Trump administrations correctly identified the need to contest China's rare earth dominance. But to do so, the US must marshal a combination of innovation, international cooperation,

• 14:52George Hahn?

  and long-term industrial planning. Based on our history, I'm optimistic. Based on our present, however, the good money is on pessimism slash catastrophe. Cutting research funding and pursuing a xenophobic immigration policy undermine innovation. Careening from one budget crisis to the next renders long-term industrial planning nearly impossible. And alienating allies while comforting dictators squanders the soft power that made the US the indispensable nation.

• 15:33George Hahn?

  One of my favorite aphorisms says, "Old men should plant trees whose shade they know they'll never sit in." Our rare earths deficit developed at the speed Hemingway attributed to bankruptcy. Gradually, then suddenly.

• 15:52George Hahn?

  Our failure is bipartisan, and blame goes to the public and private sectors alike.

• 15:59George Hahn?

  Rare earths aren't rare. Long-term strategic investment is. And the scariest resource in America today is leaders who will invest in a future we don't immediately profit from.

• 16:18George Hahn?

  Life is so rich.

• 16:29Speaker 04

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