Anita Kellogg

Assistant Professor at the National Defense University. Host of Kellogg’s Global Politics Views are my own.

[Anita Kellogg @arkellogg]

How can economic statecraft be operationalized in Department of War's strategic planning? The first step is to create a central entity to manage the tools of economic warfare. https://t.co/udoePT3qxb

[Anita Kellogg @arkellogg]

I might agree if the WTO still worked.

[Simon Lester @snlester]

Countervailing duties (along with anti-dumping duties and safeguards) have been used against Chinese imports for decades but have had no impact on Chinese subsidies. The better approach is to file WTO "adverse effects" complaints:

https://t.co/cQcP7E175i

[Anita Kellogg @arkellogg]

Unlikely scenario, but worth mentioning that this is exactly what happened to Ukraine. Instead of losing the war, however, they developed a (mostly) China free supply chain. Europe and the U.S. should be incorporating these risks into war gaming and future planning.

[Noah Smith 🐇🇺🇸🇺🇦🇹🇼 @Noahpinion]

If Russia invaded Europe, Europe would need to produce lots of drones to defend itself. But China could just cut off exports of the components Europe can't manufacture by itself -- thus allowing Russia to win the war.

This is a critical vulnerability.

https://t.co/37iyRtvF8R

[Kyle Chan @kyleichan]

Even China is trying to reduce its dependence on rare earths.

See item 22 on this list: Heavy-rare-earth-free high-coercivity sintered NdFeB technology — Ningbo Institute of Materials Technology and Engineering, Chinese Academy of Sciences

[Rush Doshi @RushDoshi]

This is an interesting question. My take: I do not quite accept the notion that China did not seek to "weaponize" rare earths and instead stumbled into a position of advantage. For at least 16 years, and likely more, the purpose has been an economic weapon. This is not like, say, solar or EVs, where excess capacity is sort of an accident.

Here, for example, is a semi-authoritative book cited by @JohnF_Sullivan on rare earth strategy written in 2011 for the state China Economic Publishing House the year after the Japan situation:

"What magical quality do rare earths possess that makes the usually arrogant and domineering Americans so furious? What magical quality do rare earths posses that leaves the usually wealthy and arrogant Japanese grief-stricken? China is the only country in the world capable of supplying all 17 rare earth elements, particularly holding a larger share of heavy rare earths that have prominent uses in military applications. To change China’s international position in the rare earth industry, since 2009, the Chinese government has launched a vigorous rare earth defense war, adopting a series of rectification measures including suspending approval of mining rights, controlling total mining volume, reducing export quotas, raising export tariffs and and severely cracking down on rare earth smuggling."

A key purpose of these post-2009 steps, which PRECEDE China's weaponization against Japan in 2010, was to hone a better coercive instrument.

Then there is some empirical evidence suggesting PRC action in this sector was about leverage.

First, most obviously, China used this as a coercive instrument in 2010. That shows, for at least 16 years, they have understood it as a critical leverage point.

Second, China's government has for decades manipulated the price of rare earths to prevent anyone else from achieving scale - dropping the price to kill foreign investment. Why did they do this when they already had 90% market dominance? The logic is toward control, not profit, and it is not the result of disaggregated independent Chinese market actors (which do not exist in this sector).

Third, related to that point, if this industry operated on economic logic, we would probably see more fragmentation. Indeed, for a brief time, we did see that before 2010. But then the PRC sharply consolidated the rare earths industry into state-backed companies. They shut down, arrested, harassed, and outright expropriated private actors. This was partly to ensure greater state control over external flows - the better to maintain leverage. The quote above refers to that effort.

Fourth, I do not think China's controls on rare earth minerals were modeled off U.S. controls. For example, the October controls went far beyond any U.S. controls. China's idea was any product, anywhere in the world, with .1% value coming from Chinese produced rare earths, required a license to be sold to anyone else in the world. The closest analogy -- and Chinese scholars have said this directly -- is to U.S. financial sanctions, not export controls.

Fifth, this is not a case where "there are many different actors, and they often overperform in search of particular targets." The industry has for a long time just been a few actors, tied to the state, acting at the state's direction. China's cultivation of leadership in this sector dates back to the 1960s, accelerating in the 1980s, with direct involvement of Deng's family in the 1990s and Premier Wen in the 2000s.

The empirical evidence seems to indicate a conscious desire to dominate this sector. One can debate whether or not such an intention was justifiable given U.S. control over chokepoints like finance.

But I think it is hard to advance the claim this was just the independent action of market participants that happened to accidentally create a position of extreme concentration and dominance.

[Scholars Strategy Network (bsky: @scholars.org) @SSNScholars]

Whatever one makes of Trump and Xi’s summit, its most durable legacy will likely be structural: new forums for managing the world’s most consequential economic relationship," writes @arkellogg (@NDU_EDU) in this
@notusperspect expert forum. ⤵️
https://t.co/Hb8KPKSo2v

[Anita Kellogg @arkellogg]

Great analysis, and as a fan, I have to love the use of Pokémon TGC

[Victor Shih @vshih2]

I put some thoughts together about the recent summit and US-China relations. Yes, the relationship is like a card game, but not poker. Instead, Pokemon! https://t.co/qNSkOeBaaD

[Anita Kellogg @arkellogg]

Little progress made on #criticalminerals tensions between the U.S. and #China .- https://t.co/olVfQs31a7

[Anita Kellogg @arkellogg]

Will there be a peace deal with Iran by May 31st? The betting odds say no, but I argue that there will be a deal by then on the latest episode of @GlobalKellogg https://t.co/zedqgMjvfE

[Anita Kellogg @arkellogg]

Finding minerals to mine is not the issue and it’s hard to see that deep sea mining will be economical to be attractive to industry. It’s processing where China has the chokehold over #CriticalMinerals and where are efforts should be concentrated.

[RAND @RANDCorporation]

Could deep sea mining break China's grip on critical minerals?

Here's what our research says about the challenges facing Washington: https://t.co/ZRkHprO4zk

[Anita Kellogg @arkellogg]

@Brad_Setser Thanks! I should I have caught that.

[Anita Kellogg @arkellogg]

This is huge! Until now, the U.S. has lacked a supply of Samarium, since China won’t sell it to companies selling to the DOW, the primary consumer of this type of rare earth magnets. #CriticalMinerals

[Brad Setser @Brad_Setser]

A bit of good supply chain news; China no longer has a monopoly on the refining of Samarian, a rare earth with important military uses

1/

[Anita Kellogg @arkellogg]

The question is, does China even need to do this? It’s very uneconomical, and only makes sense if you lack cheaper supply. #CriticalMinerals

[Jonathan Cheng @JChengWSJ]

NYT: A research arm of the Chinese government said it had published an atlas of deep-sea mineral deposits, highlighting Beijing’s ambitions to mine the ocean floor and underscoring its disputed claims to waters that neighboring nations consider theirs.
https://t.co/vp7GJDM9IU

[Anita Kellogg @arkellogg]

Excited to be discussing my @WarOnTheRocks article "Operationalizing Economic Statecraft" live at 11AM tomorrow with the Potomac Institute and War on the Rocks. Register at the link below.

[Potomac Institute @potomac_inst]

The next major war the US fights could be decided by supply chains before the first shot is fired.

Live Briefing: April 22 | 11 AM EST | Dr. Anita Kellogg and Dr. Tim Welter, moderated by @WarOnTheRocks

Register: https://t.co/3AvAgyZWAo

#EconomicStatecraft #NationalSecurity

[Bonnie Glaser / 葛來儀 @BonnieGlaser]

USA Rare Earth to Acquire Serra Verde in $2.8 Billion Deal. “Serra Verde’s Pela Ema mine is a one-of-a-kind asset and the only producer outside Asia capable of supplying all 4 magnetic rare earths at scale, together with other vital REEs, such as yttrium.” https://t.co/Y2Bw6Jiten

[Anita Kellogg @arkellogg]

Experienced my first underground mine. So cool! Thank you @FM_FCX for the excellent and fascinating tour of the Henderson Mine and Mill. #CriticalMinerals

[Tanvi Madan @tanvi_madan]

Collaborative security efforts can work...

"China has approved several Japan-bound exports of rare earths...Observers believe Beijing's move reflects its wariness amid attempts by the United States, Japan and European nations to reduce their dependence on China for rare earths"

[Anita Kellogg @arkellogg]

One large reason for this is labor shortages in rapidly aging societies. I talk about this on Kellogg’s Global Podcast 🎧 https://t.co/1g0lYQANca

[Adam Tooze @adam_tooze]

In relation to labour costs, Western manufacturing industry has FAR fewer robots than you would expect and the East Asian industrial powerhouses have FAR more. Where the robots are—featured in today’s Chartbook Top Link.

[Anita Kellogg @arkellogg]

On Kellogg’s Global Politics, we discuss Trump’s tariffs and trade deals and how they might affect the economy going forward. We also cover the conflict between Thailand and Cambodia. Finally, we have a Russia-Ukraine update. Listen on Apple, Spotify or: https://t.co/fCMY3gQjEb

[Anita Kellogg @arkellogg]

That China and Mexico are our two biggest trading partners and are both getting trade deadline extensions is probably not a coincidence.