Starving the Dragon: How the West Can Break China’s Economic Hold

The dragon’s grip tightens, choking global trade and innovation. With 80% of rare earth minerals under its control and over $900 billion in combined exports to the U.S. and Europe, China has weaponized trade dependency. From phones to batteries, chips to critical minerals, Beijing’s monopoly leaves nations vulnerable to coercion.

But what if the West fought back—not just loosening the grip, but starving the dragon entirely? Today’s announcement of a sweeping 104% tariff on key Chinese goods marks a bold step forward, signaling the growing recognition of the need to sever economic dependency on China. Now is the time for a comprehensive strategy—one that builds self-reliance, cultivates new partnerships, and turns economic dependence into a liability for the dragon itself.

Starving the Dragon: Why It Matters

Imagine a world where your phone, your computer, and even the battery powering your car all hinge on one supplier—China. This isn’t hypothetical; it’s reality. With over 80% of global rare earth mineral production, 60% of battery metals, and billions in exports to the U.S. and Europe, China has turned essential supply chains into choke points of dependency.

It's not trade, it is an economic chokehold.

This isn’t just about convenience—it’s about control. When China slashed rare earth exports to Japan in 2010 over a territorial dispute, the consequences were swift and brutal: prices spiked 500% overnight, leaving Japan’s tech sector crippled for months. Imagine that power wielded against the U.S. or Europe today—a supply cut could jack up electronics costs by 20-30%, stall production lines, and force Western firms into desperation. For nations built on innovation, such dependency is more than risky—it’s a ticking time bomb.

China knows this, and it uses its Belt and Road Initiative (BRI) to exploit the vulnerability of nations worldwide. Through economic traps and mineral dominance, Beijing secures leverage that echoes far and wide. Just look at Zambia, now burdened with $6.6 billion in debt and locked in the clutches of BRI loans. For the U.S. and Europe, this isn’t just economic coercion—it’s a hand tightening around the throat.

Breaking free is not an option; it’s survival. Reclaiming autonomy means safeguarding industries, countering China’s ambitions, and ensuring the West doesn’t find itself permanently strangled by the dragon’s grip.

The Roadmap to Weaning Off China

Breaking free from China’s grip isn’t a pipe dream—it’s a strategy. Here’s how the U.S. and Europe can pave the way to independence, transforming vulnerability into resilience:

1. Mine It—Tapping Domestic Resources

U.S. Steps Up: California’s Mountain Pass mine, a cornerstone of rare earth production, currently yields 40,000 tons annually. With a $500 million investment, it’s set to scale up to 50,000 tons—a significant boost in domestic supply, cutting China's grip on the global supply chain. Meanwhile, Texas’s Round Top project is gearing up to join the effort, housing an estimated 1.6 million tons of rare earth minerals. By 2030, it aims to add 20,000 tons annually to the U.S. market. Nevada’s Thacker Pass is also stepping into the spotlight, with lithium production expected to reach 40,000 tons per year starting in 2026.

Europe Gets Serious: Across the Atlantic, Europe is tapping its own resources to break free from its reliance on China. Sweden’s Norra Kärr project and Germany’s Erzgebirge site hold massive potential, with a combined capacity to deliver 10,000 tons of rare earth minerals annually by 2030, backed by €1.5 billion in investments. Portugal, home to significant lithium reserves, is ramping up production to meet Europe’s growing battery demands. These efforts mark a serious commitment by the EU to secure its supply chains and bolster energy independence.

2. Recycle It—A Treasure in E-Waste

Each year, 50 million tons of e-waste are discarded—filled with recoverable metals like cobalt, lithium, and rare earths. By investing $1-2 billion into recycling plants modeled after Japan, the West can reclaim 2,000 tons of rare earth and 5,000 tons of cobalt annually.

3. Shift It—Alternative Trade Partners

Forge resilient supply chains by deepening partnerships with resource-rich allies. Australia, with its vast reserves of 4 million tons of rare earth minerals, offers a stable alternative to China’s dominance. Vietnam, rapidly emerging as a manufacturing powerhouse, is well-positioned to absorb $122 billion worth of Chinese exports, bolstering regional trade networks. Meanwhile, Taiwan remains a critical partner, supplying $51 billion in advanced tech imports. The investment in TSMC's Arizona chip plant marks a significant step forward, set to double U.S. chip production by 2028 and reduce reliance on overseas suppliers. Together, these partnerships create a robust foundation for economic independence.

4. Innovate It—Reducing Dependence

The EU’s Horizon program, funded with $100 billion, is driving technologies like graphene chips, which reduce rare earth requirements by 20%. Diversified manufacturing and green tech pave the way to a more resilient future.

5. Collaborate It—A Joint U.S.-EU Push

A combined U.S.-EU trade pact, pooling $20 billion for mineral R&D, cements a collective strategy. This partnership leverages an $800 billion trade relationship to prioritize non-China suppliers and foster global supply alternatives.

The Sanctions Twist

Sanctions aren’t abstract—they’re already reshaping the global playing field. Today’s 104% tariffs on Chinese exports will send shockwaves through supply chains, raising costs but also incentivizing businesses to seek alternative suppliers.

By targeting nations where 20% or more of imports rely on China, future swift sanctions could amplify the impact. For example, tariffs on India’s $118 billion in imports or ASEAN’s $600 billion trade volume would strike at Beijing’s enablers, forcing them to realign trade policies with the U.S. and EU.

The Big Idea: Economic Pressure as Leverage

Sanctions target nations where 20% or more of their imports come from China. For example, India’s $118 billion in imports or ASEAN’s $600 billion trade volume could trigger automatic penalties. Tariffs ranging from 10-25% or outright trade bans would hit these nations where it hurts—their exports to Western markets, valued at $1.8 trillion annually.

The Ripple Effect

Countries relying heavily on Western markets face a critical choice: continue feeding China’s economic machine or retool supply chains to align with U.S.-EU policies. Indonesia, for example, could lean West to safeguard its nickel exports, while India might rethink its reliance on China in favor of regional alliances.

China, meanwhile, could face a $500 billion hit to its export markets, with GDP dipping 2-3%. While Beijing may retaliate by undercutting rare earth prices (dropping them to $50/kg versus the current $70/kg), the West’s strategy to diversify supply chains and stockpile materials would blunt the blow.

Addressing the Risks

Sanctions aren’t without consequences. India’s massive population and ASEAN’s growth mean trade disruptions would ripple through global markets. Additionally, China’s price manipulation could undercut developing U.S. and EU mines.

The Solution: A $10 billion U.S.-EU aid package could help sanctioned nations retool their supply chains. For instance, India could boost its textile industry while ASEAN nations expand industries less dependent on China.

The Payoff

In the short term, sanctions raise costs—electronics up 5-10%, batteries 15%. But stockpiles, including a six-month rare earth buffer in the U.S., buy time. Jobs shift as 50,000 miners in the U.S. and 30,000 in the EU offset trade losses.

By 2035, the West will self-supply 60% of its rare earth needs and 70% of its lithium and cobalt. China’s share drops to 40%, while the Belt and Road Initiative falters as debtors pivot to the West. Tech stays alive—PCs flow, chips hum—and Beijing’s economic conquest stalls.

Call to Action

The time for complacency is over. The U.S. and Europe cannot afford to remain tethered to China’s economic dominance, risking innovation, autonomy, and global stability.

Policymakers, industry leaders, and citizens must rally behind a vision of self-reliance and resilience. To the White House, the European Commission, and leaders across the globe: the tools to break free are within reach. Invest in domestic resources, forge alliances with like-minded nations, and hold enablers of China’s monopoly accountable.

Together, we can dismantle the dragon’s grip and reclaim the power to shape our own economic and technological future.