China's Rare Earth Industry and Export Regime: Economic and Trade Implications for the United States [April 30, 2012] [open pdf - 684KB]
"Over the past few years, the Chinese government has implemented a number of policies to tighten its control over the production and export of 'rare earths'--a unique group of 17 metal elements on the periodic table that exhibit a range of special properties, such as magnetism, luminescence, and strength. Rare earths are important to a number of high technology industries, including renewable energy and various defense systems. China's position as the world's dominant producer and supplier of rare earths (97% of total output) and its policies to limit exports have raised concerns among many in Congress, especially given the importance of rare earths to a variety of U.S. commercial industries (e.g., hybrid and conventional autos, oil and gas, energy-efficient lighting, advanced electronics, chemicals, and medical equipment), as well as to U.S. defense industries that produce various weapon systems. Many are concerned that rising rare earth prices could undermine the global competitiveness of many U.S. firms (lowering their production and employment), impede technological innovation, and raise prices for U.S. consumers. Others are concerned that China's virtual monopoly over rare earths could be used as leverage against major rare earth importers, such as the United States, Japan, and the European Union (EU). […] This report examines the economic and trade implications of China's rare earth policies for the United States."
CRS Report for Congress, R42510