The Era of Protectionism In TikTok And Rare Earth Elements: How China Is Counter Diminishing Strategic Weight For Its Own BATNA – Analysis

October 23, 2025October 23, 2025 Jumel Gabilan Estrañero 0 Comments

Barely three months before the 2025 ends, United States finds itself structurally vulnerable in the supply chain for critical rare-earth elements (REEs), while China holds disproportionately strong leverage. China commands around 85% of processing and more than 90% of magnet production.

Moreover, the U.S. (under the Donald Trump administration) is ramping up its efforts to build a domestic supply chain for rare earths—including via legislation such as the Rare Earth Magnet Security Act and the Critical Minerals Security Act. In fact, a key U.S. deal: the MP Materials mine (in the U.S.) is backed by the U.S. Department of Defense, which will become the largest shareholder and commit to off-take plus price-floor mechanisms. But despite this push, the U.S. still lacks commercial-scale capability in heavy rare-earth separation, magnet manufacturing know-how, and has an “expertise gap.”

Meanwhile, we can observe that China is not passive. It is reportedly cataloguing rare-earth experts, monitoring travel, tightening controls. The up-shot is that China retains a “powerful hand” in any near-term U.S.–China trade fight because of its dominant position. In other words, the rare-earth supply chain as a strategic vulnerability for the U.S. and a tool of leverage for China.

Geopolitical Vulnerabilities and Strategic Stakes

Prior to this October development, only last month, a deal has been reached between the Trump administration and China to keep TikTok operational in the United States. That an emerging TikTok deal with China will ensure that U.S. companies control the algorithm[2] that powers the app’s video feed. On the technicality and legal terms of the deal, the app will be spun off into a new U.S. joint venture owned by a consortium of American investors — including tech giant Oracle and investment firm Silver Lake Partners.

On the other hand, the recent move by China relative to the rare earth minerals is not just a trade-issue; it is a strategic one. Several interlocking dimensions emerge:

a) Strategic materials as geopolitical leverage
China’s dominance in REE processing and magnets gives it the potential to exert coercive leverage. China being able to “switch on the tap whenever they want and switch it off whenever they want and control the market.” In a geopolitical standoff, controlling inputs to military systems (fighter jets, submarines, missiles)is a source of power. For example, many U.S. defense platforms rely on foreign REEs. Meanwhile TikTok, by contrast, is a maturing consumer app with diminishing strategic weight as pointed out by Dimitar Gueorguiev, Syracuse University associate professor of Political Science.

b) Decoupling / supply-chain sovereignty
This dynamic is a key driver behind the U.S. legislative push. Relatively, the U.S. wants to reduce dependence and insulate itself from Chinese leverage. In other words, this is how domestic policy is shifting toward industrial security rather than just market-efficiency. This ties into broader trends of “friend-shoring” and supply-chain diversification.

c) First-mover advantage and path-dependence
China is not kidding when it already projected its power prior the recent plenum. China built its rare-earth ecosystem decades ago; the U.S. is playing catch-up. It is true that U.S. had a robust industry long ago, but de-prioritized it (closures of the Bureau of Mines, less R&D) and now suffers the consequences. Such path-dependence means the structural disadvantage is real and hard to overcome quickly.

d) Signal to allies / third parties
China’s ability to weaponize or threaten to weaponize supply introduces systemic risk to allied manufacturing chains. Nations besides the U.S. are “alarmed” and will definitely react in the coming days. Thus, Chinese behavior may trigger attempts by allies to reduce dependence, which in turn weakens China’s leverage over the longer term.

e) Industrial policy, national security and the environment
The rare-earth issue sits at the intersection of defense, clean energy (wind turbines, EVs), and environmental/industrial policy. In return, we can observe that the government policy is now stepping in to pick winners (e.g., price floors, offtakes, legislation). This indicates a broader shift in how governments view supply chains: as strategic assets, not just commercial ones.

Risks and Challenges

Any acts by states has its own consequence/s. Explicitly or implicitly, several risk-areas can be divested in various terms. One of which is becoming over-reliance on China means vulnerability.

The U.S. remains vulnerable in the near-term because of China’s dominance, particularly in heavy rare earths and magnetic inputs. Until the U.S. (and allies) build viable alternatives, the risk of supply disruption (or threat thereof) remains.

Second, difficulty in building alternative supply-chains. Building a mine-to-magnet chain is technically complex, capital-intensive, environmentally challenging, and time-consuming. Processing heavy rare earths and magnet manufacturing requires know-how. This means the “decouple” path is far from trivial.

Third, on environmental & community trade-offs, rare-earth extraction/processing is environmentally fraught (pollution, toxic waste). China has borne much of that cost; outsourcing to other jurisdictions may raise local resistance, regulatory risk and higher costs.

Fourth, there is a potential backlash or unintended consequences. If China uses its leverage (via export restrictions or pricing manipulation), it may trigger the very diversification that erodes its dominant position. There is also a fair warning that China’s over-use of this card could backfire.

And lastly, a geopolitical escalation and eventual supply shock risk. Should China choose to weaponize the supply-chain (for example in response to U.S. sanctions or military tensions), there’s risk of major disruption. How? Once supply of magnets or heavy rare earths is cut or restricted, the ripple effects on high-tech manufacturing and defense readiness could be significant.

Based on the analysis, here are some plausible futures and what policy/strategy might do (likely trajectories & strategic recommendations).

Trajectories:

Short term (1-3 years): The U.S. will continue to ramp up domestic capacity (legislation, subsidies, offtake agreements) but will still remain dependent, especially for heavy rare earths and magnets. China retains near-term monopoly power.
Medium term (3-7 years): If U.S. and allied investments pay off, alternative supply chains will begin to emerge (e.g., Australia, Canada, U.S.). Market share of China may gradually decline, but inertia favors China.
Long term (7-15+ years): A more diversified global rare-earth processing & magnet manufacturing ecosystem may develop, reducing Chinese chokepoint leverage. But the transition is slow and expensive.

Strategic recommendations:

For U.S. / allies / industry:

1. Invest in mid-and downstream capabilities: Focus not only on mining but also processing, separation, magnet fabrication, recycling. Without the whole chain, dependence remains.

2. Strengthen partnerships / “friend-shoring”: Work with trusted allies (Australia, Canada, EU) to build joint supply ecosystems. Shared standards, financing, R&D.

3. Diversification & redundancy: Avoid putting all eggs in one basket. Explore alternative geographical sources, recycling, substitution research.

4. Resilience over cost: Accept that strategic supply chains may cost more than purely commercial ones. Governments may need to subsidize or provide offtake guarantees (as U.S. is doing with MP Materials) to make projects viable.

5. Monitor and deter levers of coercion: Recognize the risk that China (or others) may weaponize supply chains (export bans, licensing delays, regulatory pressure). Build intelligence and policy frameworks to foresee and mitigate.

6. Environmental & social governance (ESG) alignment: Since extraction and refining are environmentally intensive, building new chains must consider regulatory, community, and sustainability risks; aligning ESG may help attract investment and public acceptance.

For the part of China, it will likely continue to protect its dominant position, but must manage the risks when it comes to:

Over-using leverage could trigger accelerated diversification by rivals, reducing China’s future advantage.
Domestic environmental/social cost of rare-earth mining may become politically sensitive; outsourcing extraction (e.g., Myanmar) carries reputational and strategic risks.
China may increasingly shift from raw-material exporter to value-added manufacturer, moving up the chain.

Conclusion

Indeed, rare earths are now more than just commodities; they are strategic assets in great-power competition. China currently holds significant leverage, placing the U.S. and its allies in a reactive position. While the U.S. is mobilizing industrial policy to respond, structural disadvantages remain, especially in the short term.

From a broader point of view, this is a microcosm of larger trends: supply-chain fragmentation, strategic decoupling, industrial re-nationalization, and significantly the weaponization of interdependence. How well the U.S. and its partners can convert rhetoric into real, diversified supply chains will shape not only their industrial competitiveness, but also their strategic resilience in an era of heightened U.S.–China competition.

At the height of trade tension and political maneuvering, we can see that China is more interested in retaining access to U.S. technological asset and services (let alone manufacturing), at least in the short term. Reason being is that it can build up self-sufficiency and resiliency in semiconductor, artificial intelligence and advanced manufacturing; a considerable front lines of technological and resource competition.

*Ideas and/or views expressed here are entirely independent and not in any form represent author’s organization and affiliation.

[1] Best Alternative Negotiated Agreement (BATNA)

[2] Note that about 43% of U.S. adults under the age of 30 say they regularly get news from TikTok, higher than any other social media app including YouTube, Facebook and Instagram. (Pew Research Center Report, 2025)