The trade war between the U.S. and China is turning into an MMA-style cage match. President Donald Trump just announced 100% tariffs on Chinese-made goods, while President Xi Jinping has slapped a near 100% ban on critical minerals from China into the U.S. Xi’s move makes the heart of the conflict clear: The ultimate winner will be the country that dominates critical minerals mining supply chains and the innovative energy that critical minerals make possible.
Critical minerals and the burgeoning field of renewable energy reliant on critical minerals are essential to winning the global race for AI dominance, building a strong national defense, spurring innovation, fueling growing cities, and curbing rising electricity prices. On each of these fronts, America can only neutralize China’s leverage and win the trade war if we accelerate energy production. That requires the government letting fossil fuels, renewables, and other advanced, mineral-dependent energies compete without picking winners and losers.
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Some would call this an all-of-the-above energy strategy. The problem is that all of the above has come to mean different things to the Left than to the Right. To some, it means adding renewables and nuclear to our mix. For the far Left, all-of-the-above has meant none-of-the-below, namely fossil fuels.
Instead, we need a best-of-the-above-and-below, made-in-America energy strategy that overcomes the minerals and supply chain risks from being overly reliant on any one resource, technology, or country.
The Trump administration is already on a mission to unleash American energy, and it’s working. Natural gas output is at record highs, and we produce more oil than any other nation on earth. The administration is also working aggressively to secure critical minerals, which is all the more necessary considering China controls over 80% of critical mineral processing.
To put even more electrons into the grid, the government should get rid of red tape and shortsighted policy positions holding back our energy potential.
Take fossil fuels. It doesn’t matter how much oil and gas we produce if we can’t transport and use them. Pipeline construction has long been hobbled by frivolous lawsuits, political infighting, and labyrinthine bureaucracy. And what’s worse for the environment, a pipeline or a highway crowded with tanker trucks?
Pipelines are actually good for the environment, but you wouldn’t know that by our laws and web of regulations. The CEO of Williams, an energy infrastructure company, recently said that securing permits for one of his company’s pipelines costs twice as much as building the pipeline itself.
Meanwhile, because past leaders allowed America’s industrial capacity to dry up and flee to low-labor cost countries such as China, GE Vernova now has a three-year order backlog on gas turbines that turn natural gas into electricity.
Oil and gas are far from the only energy fields harmed by misgovernment.
Policymakers let China effectively corner the rare earth production market. Critical minerals are essential for battery storage technology, electric vehicles, solar panels, and essentially the entire renewable industry, which China is likewise dominating.
The Trump administration is attempting to end this strategic blunder, having recently inked a multi-billion-dollar, long-term deal to resurrect the Mountain Pass critical mineral mine in California. Yet while major federal subsidies make splashy headlines, we shouldn’t ignore the ways government action stifles mineral extraction.
For example, companies such as Lilac Solutions are innovating in the field of direct lithium extraction. Traditional lithium mining demands immense amounts of water, land, and time. The direct lithium extraction being pioneered right now in Utah’s Great Salt Lake uses leftover brine water, including wastewater from oil and gas extraction, along with ion exchange to drastically reduce the inputs required for lithium mining.
Despite being minimally invasive, any industry with “mining” attached to the name is hyper-regulated in the United States. The high cost and uncertainty of government red tape make innovations such as direct lithium extraction very risky for the private sector, especially when businesses know they are only one environmental lawsuit away from going under.
Internationally, other critical mineral sources, such as those found in nodules on the deep seabed floor off the coast of the Cook Islands, could help the U.S. access sources of polymetallic sulfides and cobalt without having to dig out wide swaths of earth. However, more overzealous environmental regulations limit our ability to access these alternative sources sustainably, leaving us continually reliant not only on China but also on more ecologically damaging mining methods.
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The free market has an uncanny ability to produce what we need in abundance, and energy is no exception. But right now, America’s minerals and energy sectors are fighting with one hand tied behind their backs — tied with bad policy and government red tape.
It’s not the government’s job to pick winners and losers, especially not by hyper-regulating some industries while allowing others to thrive. Our leaders should couple fewer and smarter regulations with letting the private sector do what it does best — freely developing and delivering the most abundant, affordable, reliable, and cleanest options possible. Only then will America outpace China.
Drew Bond is the co-founder, president, and CEO of C3 Solutions.