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Beyond the Rhetoric Lies the Hard Reality of Materials Supply — ARPN’s McGroarty on U.S. Ban of Huawei’s 5G in the Context of Resource Policy

In a new piece for The Economic Standard, ARPN’s Daniel McGroarty discusses critical mineral resource challenges associated with “the great U.S.-China decoupling.”  He does so against the backdrop of the U.S. decision to ban Huawei’s 5G network and imposition of travel sanctions on Huawei employees — a move McGroarty says may well be called the “first battle of the U.S.-China tech war, the contest to define — and dominate — the technology Operating Systems of the 21st Century.”

Outlining both the opportunities and risks of the cutting edge technology of 5G, which are equally tremendous, McGroarty writes that “[i]n a rabidly partisan political climate, Huawei worry is one of the few afflictions that affect both U.S. political parties,” and points to a new White House strategy document on how to secure 5G, as well as the Biden presidential campaign’s plan on the issue.  While both recognize the security risks involved, McGroarty laments:

“What neither plan does in any detail is reckon with the unique material inputs required for the U.S. to begin its own 5G buildout. Here, as in its blinding speeds, 5G is like no network that’s come before” — requiring significant quantities of “one of the rarest of rare earths:” 

He goes on: 

“With the U.S. currently 100% import-dependent for the rare earths, where does the world get its Erbium? From China. So as the U.S. thumbs its nose at Huawei, it’s worth wondering how China will react when it comes to selling American and allied nation companies the Erbium they need to build a 5G alternative.”

While the “U.S. has deposits rich in the very rare earths needed to build our own 5G, as well as all of the 22 minerals and metals on the U.S. Government’s Critical Mineral List,” for now, China is either main supplier globally, or the United States’ leading supplier, and in some cases, it is both — a fact that is easily overlooked, but impossible to ignore. 

McGroarty closes: 

“So the next time you read an article that talks about reshoring America’s manufacturing capability or bringing critical supply chains back from China to the U.S., bear in mind that, beyond the rhetoric of decoupling, there’s the hard reality that manufacturing requires ready access to the materials that make things work. It’s one thing to ban Huawei’s 5G, and quite another to build an American alternative – when China controls the minerals and metals it’s made of.”

Read the full piece here.