The 21st-century technological revolution, driven by global electrification and renewable energy, critically depends on rare earth elements (REEs). These 17 distinct elements power everything from electric vehicles and wind turbines to advanced defense systems, making their secure supply imperative for national security and economic stability. Nations are now intensely vying for control over these irreplaceable materials, as geopolitical tensions amplify existing supply chain vulnerabilities.Rare earths are broadly categorized into light and heavy REEs. While light REEs are abundant, heavy REEs—including dysprosium, terbium, and neodymium—are crucial for high-performance permanent magnets, essential in high-temperature applications like EV motors and military components. China commands nearly 99% of global heavy REE processing, a dominance stemming from decades of protected technical advancements in separation and sustained state subsidies that have effectively stifled international competition.Despite significant U.S. Department of Defense investments, the United States remains heavily reliant on Chinese-processed rare earths and magnets. Domestic producers project limited output, a mere fraction of China’s substantial production. Even promising domestic breakthroughs remain in pilot stages, challenging the U.S. goal of an independent REE supply chain by 2027.China’s strategic advantage is rooted in its vertically integrated rare earth ecosystem, spanning mining, refining, and magnet production. This control, bolstered by industrial policy, grants Beijing significant strategic leverage, demonstrably exercised through actions like the 2010 export cutoff to Japan and targeted licensing restrictions in 2023-2024. These calibrated interventions highlight China’s long-term, high-commitment approach in this asymmetric geopolitical game.The strategic importance of rare earths was further underscored by U.S. tariffs on Chinese imports in 2025. Beijing retaliated by restricting exports of critical rare earths, triggering warnings of severe production disruptions. A provisional London deal saw China agree to resume shipments for tariff reductions. While hailed as a victory, its vague details and unclear enforcement mechanisms leave the fundamental vulnerability unaddressed. Defense sector reliance is stark, with U.S.-extracted ore still largely shipped to China for processing despite critical needs for advanced military hardware.In response, Washington has adopted a patchwork diversification strategy. Efforts to develop alternative sources, such as Greenland’s mining potential, face formidable structural limitations including nascent infrastructure, complex permitting, and indigenous land rights. Mining in Arctic conditions is capital-intensive and environmentally sensitive, testing whether democracies can pursue high-stakes resource development without compromising transparency or environmental integrity.Japan offers a distinct strategic response, emphasizing scientific autonomy and technological self-sufficiency. Following China’s 2010 embargo, Tokyo rapidly diversified its supply lines through recycling and intensive deep-sea R&D. This culminated in a landmark 2024 discovery of over 230 million tons of cobalt- and nickel-rich manganese nodules, also containing heavy REEs, within its exclusive economic zone near Minamitori Island. Japan’s technological prowess in deep-sea extraction could significantly enhance its strategic position in the broader clean energy supply chain.