CounterPunch Exclusives

CounterPunch Exclusives

The New Cold War of Rocks vs. Chips

Photo by Vasilis Chatzopoulos

When monsters square off, they are quick to showcase their asymmetrical superpowers.

Take Godzilla, for instance. Thanks to U.S. atomic testing in the Pacific, the dinosaur-like sea creature has explosive, radioactive breath that can destroy everything in its path. His archenemy Rodan, meanwhile, is a pterodactyl-like bird that can fly at supersonic speeds, a skill useful in avoiding atomic bad breath. Since the 1960s, the two giant monsters have duked it out across a series of Japanese films, causing much mayhem in the process.

Originally the product of Cold War fears of nuclear peril, these archetypal monsters can stand in for the principal geopolitical antagonists of today. Like their monster kin, China and the United States have very specific and complementary superpowers. China controls the majority of critical minerals in the world, with a special focus on rare earth elements. The United States has a technological edge when it comes to the most sophisticated semiconductors needed for artificial intelligence applications.

Put bluntly: China has the rocks, and America has the chips.

With these superpowers on display, the two countries have clashed in a series of trade negotiations, tense military standoffs, and high-level political meetings. They are engaged in a prolonged tug-of-war not to save the world — as in some comic-book universe — but in the service of their own national aggrandizement and transnational greed. While they dicker, the world slouches toward bedlam.

A Pause in Hostilities

When President Donald Trump met with Chinese leader Xi Jinping in Beijing in mid-May, the exchanges were unexpectedly cordial. The two countries had been engaged in an on-again, off-again war of tariffs since Trump had begun his second term, a conflict that threatened to spiral out of control. At the same time, the Chinese were deeply concerned about the impact of the U.S.–Israeli war against Iran on international stability, given spiking oil prices and their ripple effects on the global economy.

Yet, at this meeting in China, the two leaders converged on a common goal of “constructive strategic stability.” In order to forge this condominium of superpowers — a G2 — Trump was willing to delay arms deliveries to Taiwan. He also greenlighted the sale of sophisticated (though not the most advanced) Nvidia computer chips to China. In turn, China agreed to increase its purchases from the United States, including 200 Boeing aircraft and $17 billion of agricultural goods each year through 2028.

The hoopla surrounding the summit, generated by press offices on both sides, obscured the reality that the two countries completed few concrete bilateral deals. Trump did not secure long-term access to the critical minerals that China controls — specifically the rare earth elements that are essential to U.S. high-tech manufacturing and sophisticated military hardware — and the tech giants that accompanied Trump on the trip didn’t win any major concessions in the form of enhanced access to the Chinese market. Meanwhile, China failed to alter U.S. security policy in the Asia–Pacific region. The leaders of the new G2 might be expected to rethink or rework the global rules of the road, but this was not on the agenda in Beijing.

Still, the two superpowers stepped off the path of escalating confrontation. Perhaps more importantly, Trump has seemingly abandoned his earlier goal of decoupling the United States from the Chinese economy, which, along with ratcheting up containment of the “strategic competitor,” had become something of a bipartisan imperative.

For the time being at least, the world’s superpower monsters are not laying waste to the landscape around their feet. Given how much firepower they command, that’s no small achievement. The battle, however, continues to rage further afield in the mineral world.

Rare earth elements, or REE, aren’t rare. But it can be quite difficult to extract any of these 17 unusual metals from their surrounding ores. The United States used to be the world’s leading extractor and processor of these resources, from a mine in California near the Nevada border. But that was back when REE were mostly used for such products as black-and-white televisions. The environmental damage caused by the extraction and processing — as well as the labor costs involved — impelled the United States, over time, to outsource operations to China.

By the time REE had become........

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