Palantir Technologies Inc. (NYSE:PLTR) Head of Defense Mike Gallagher warned on Wednesday that China’s dominance in rare earth production poses an immediate threat to U.S. economic and national security.
China Controls 90% of Critical Magnet Production
“Rare earth magnets are in most anything that moves — whether it be cars, nuclear submarines, or fighter jets,” Gallagher wrote on X. “China’s stranglehold on rare earth production means we’re just one Chinese export control away from an economic and national security disaster.”
Critical Infrastructure Vulnerability Exposed
China controls approximately 90% of global rare earth magnet production, with the remaining 10% concentrated in nations increasingly aligned with Beijing, according to Gallagher’s Fox News interview. These magnets are essential components in wind turbines, electric vehicles, fighter jets, and nuclear submarines.
"[Chinese President] Xi Jinping‘s predecessor, Deng Xiaoping, famously said, ‘The Middle East has oil; China has rare earths,'" Gallagher stated, referencing Deng’s 1987 strategic assessment, according to National Defence Magazine. Deng served as the paramount leader of the People's Republic of China from 1978 to 1989.
Trump Administration’s $400 Million Response Strategy
The Trump administration recently invested over $400 million in MP Materials Corp. (NYSE:MP), which Gallagher called “a brilliant and bold move.”
Apple Inc. (NASDAQ:AAPL) separately announced a $500 million deal with MP Materials in July to secure magnet supplies for hundreds of millions of devices, marking the first major tech company supply agreement following China’s export restrictions.
Geopolitical Decoupling Accelerates Supply Chain Risks
Gallagher, who served as Wisconsin’s Eighth District representative from 2017-2024, previously warned that “Xi Jinping is decoupling from us” and cited China’s $300 billion annual technology theft efforts as evidence of systematic economic warfare.
The former congressman authored legislation forcing TikTok’s divestment from Chinese ownership and advocates for coordinated decoupling strategies with allies, particularly Japan, to reduce critical supply chain vulnerabilities.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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