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The Reckoning @sethjlevy - I want to get ahead of a likely and predictable narrative, that Trump capitulated to China in a grand bargain.
They will say the TACO king backed down from his trade war.
However, it’s important to understand the dynamics leading to this moment, who started the fire and Trump’s goal from the beginning.
To begin with, a lot changed from 2017 to 2025. When Trump first entered the Oval Office AI computing was literally at its infancy. In May 2017 the first Nvidia AI specific chip had just been announced. In October 2020, right before Trump lost his reelection bid, Tesla released their initial beta version of full self driving to a few testing users and Trump was already out of office, in August 2021, by the time Tesla started working on Optimus.
By the time he was sworn in a second time, in January 2025, the AI robotics revolution was in full swing. Along with it came the dependence on rare earth elements (REE) as a key input to nearly every new tech product. From 2017 through 2024, the production of REE nearly quadrupled and nearly all of that increase happened in China where they maintained 90% of the overall worldwide production.
Having people like Elon Musk and David Sachs advising Trump in 2024 helped him to understand the true stakes involved in winning or losing the AI, robotics race. As I wrote in my article back in March of this year, “The economic world war no one saw coming”, it is, from a national security perspective, necessary that the AI chips and robots be manufactured in the United States. But you can’t manufacture these things domestically without access to REE.
This was the world as it existed when Trump was sworn in. His long held beliefs, like tariffs are good and we need to revitalize domestic manufacturing, were more important than ever but for new reasons. This was no longer a populist nationalistic desire to revitalize the Midwest and reduce deficits. It was now the best path towards a key national security imperative and a full revitalization of the American economy.
Ulike his first term, the goal this time was clear. Do whatever it took to secure the necessary inputs to build up American industrial capacity. The reality was that China held a near total monopoly on refined REE.
Everything Trump leveraged against China, the tariffs, the chip controls, the port fees, all of it was designed to shape the parameters of the deal Trump seems determined to secure in the coming days.
Most of the concessions will just be the unwinding of Trump engineered escalations. They were designed from the start for this purpose.
Why? Because to secure the new golden age we must build the new tech revolution in American manufacturing facilities and those facilities will need REE and it will take us a decade to build up our ability to refine REE at scale.
We literally can’t afford to wait.
Bar chart titled Global Refined REE Production 2017-2024 displays total global refined REE production in kt REO per year with blue bars increasing from about 150 in 2017 to around 350 in 2024 along the x-axis years 2017 to 2024 and y-axis from 0 to 400.
https://x.com/sethjlevy/status/1982206174226161826
Reddit Lies @reddit_lies - If we shut off the internet for a period of 30 days, I'd be willing to bet most of these people would reverse course.
https://x.com/reddit_lies/status/1982749888996581450
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