Revving up reindustrialization and ensuring American economic dominance in the future is by embracing what made us an industrial powerhouse in the past.

As much as “critical mineral” has become a buzzword in DC policy circles, we too frequently lose sight of how they fit into a larger vision of American industry.

Earlier this week, Vice President Vance articulated that vision as the keynote speaker at a16z’s American Dynamism conference. He spoke of an economy that rewards innovation, promotes domestic manufacturing, and provides American workers with both prosperity and purpose. So far, this is the most direct articulation of the Trump administration’s plan for reindustrialization.

If we’re bringing manufacturing back to America, we should do it from the ground up. Reshoring and securing critical mineral supply chains will be an essential part of that larger program. But before explaining how, it’s worth revisiting why critical minerals are important.

They’re critical not only because we use them for essential military and commercial products, but because their supply chains are unreliable. We source plenty of vital inputs domestically. But of the 50 minerals on the 2022 USGS critical mineral list, the US is 100% import reliant for twelve of them. China is the top producer for twenty-nine of the listed materials.

The threat of overreliance on China isn’t only that the Chinese could cripple our production of essential military equipment. The real crisis is that, right now, China is acting with the knowledge that it can do so. As long as our warfighting ability relies on Chinese goodwill, we invite challenges to American power.

For many critical minerals, we can choose to decrease reliance on China. While we’ll always have to rely on foreign sources to some degree, we should rely on American industry as much as possible. To be clear, there is no reindustrialization without revitalizing domestic raw material production.

Why? In his speech, Vance highlighted one myth of globalization: “rich countries would move up the value chain while the poor countries made the simpler things.” He rightly noted that America’s historical innovation came from its manufacturing – from the ground up.

Different sequences in advanced manufacturing supply chains have knock-on effects. Innovation occurs in clusters: think Bell Labs and Silicon Valley. Vance mentioned the network effect by name, saying that “it should be no surprise that when we send so much of our industrial base to other countries, we stop making interesting new things back home.” We cannot relegate ourselves to advanced design and expect to still retain our technological edge. Bringing back American manufacturing, from raw materials to finished products, will spur innovation.

That technological innovation will be the key to fortifying our raw material supply chains. Remember, critical minerals are only critical because of contemporary economic and political factors, which we can change.

Take oil, for instance. In 2008, the United States imported nearly half of its oil supply. But in the 2010s, we dramatically increased natural gas production because of breakthroughs in extraction technology. During President Trump’s prior term, the United States became a net exporter of oil products, achieving what he termed “energy independence.” In this case, innovation was the key to reducing American dependence on unreliable foreign producers of a strategic resource.

The same could happen for critical minerals. As President Trump further develops our domestic sources of energy, he should also pursue raw material sovereignty, with the goal of eliminating import reliance as much as possible.

We’ll only develop new mining, processing, and usage technologies if we’re producing these inputs. It’s no surprise that, as China took on a greater role in raw material provisioning, it subsequently found new and better ways to utilize them. Vance’s view of technology is very important here – we can simultaneously reshore raw material production while investing in technology to decrease reliance on those same materials.

In many ways, this is a story of cutting costs rather than pushing the envelope.

Vice President Vance tied American corporations’ hunger for cheap labor to stagnation in innovation and productivity. I would argue that a similar dynamic applies to the usage of cheap raw materials. Rather than finding ways to do more with less, we’ve given up American mining and refining in return for less expensive supplies abroad. But for all that price-consciousness, we’ve given little thought to the national security costs of foreign resource reliance.

This is the core of Vance’s critique: it’s not that the system is malfunctioning – this is exactly what the system was designed to do. The last forty  years of economic policy intentionally put us in this position.

Contrasting with the past, he offered a positive vision for the future: “When you erect a tariff wall around a critical industry … and you combine that with advanced robotics and lower energy costs and other tools that increase the productivity of American labor, you give American workers a multiplying effect.” Foreign overproduction and price shocks have killed American mines and processers before they even deliver results. A combination of protective tariffs and price stabilization programs could give domestic producers the support they need to eventually stand on their own.

Critical minerals are an essential part of the Trump administration’s vision. Capitalizing on the AI revolution? We’ll consume record quantities of energy and copper. Peace through strength? That’ll take a secured supply chain for rare earths and other critical materials. And reindustrialization? We’ll need to start mining and processing here if we want to maintain our technological edge.

The way to ensure American economic dominance in the future is by embracing what made us an industrial powerhouse in the past. As Vance himself stated: “We can only win by doing what we always did: protecting our workers and supporting our innovators.”

Farrell Gregory is the chief editor at the Oxford Emerging Threats Journal and a fellow at the Foundation for American Innovation. As a Research Assistant at the Yorktown Institute, he’s published analyses of Chinese foreign policy and national security topics. You can read more of his work @efarrellgregory on X.

Image: Shutterstock:Prostock-studio

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