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US Senator Introduces Rare Earth Funding Bill to Thwart China

The US Republican Senator Ted Cruz introduced a legislative bill to help revive the U.S. rare earth industry by providing tax breaks to mining developers and manufacturers who purchase their products. This is the latest attempt by Washington to break China's control over the strategic sector.

China is the world's largest producer of rare metal elements. Rare earth is a general term for 17 kinds of mineral elements used to make electronics and military equipment. During the ongoing Sino-US trade war, the country has threatened to stop exporting the specialized minerals to the United States, prompting efforts by Washington to help revive its domestic rare earths industry.

If Cruz's proposal is approved, it would allow mining companies to deduct taxes on the cost of construction, processing facilities and equipment purchase of rare earth mines. It might be the first step in addressing China's dominance in the rare metals sector is prioritizing domestic U.S. rare metal development.

The bill will also allow electronics manufacturers to deduct twice the cost of US rare element products, including magnets. This move aims to entice companies to reduce the purchase of rare metals from China and increase their purchases from the United States. The bill will also require the Department of Defense to use US-made rare metal products in all weapons.

"I believe China is the most significant geopolitical threat to the United States for the next century," Cruz, a Texas Republican, said in a statement. Cruz's proposal also would provide $ 50 million in grants for rare earth pilot projects in the US, with roughly a third allocated for minerals recycling from old mine waste, among other sources.