by Free Trade is not free– especially when someone can easily shut you off from things you need. Friends you have today may not be friends tomorrow, and being able to control your supply chain and have manufacturing by your own people for your own people is important.
Nowhere is this more obvious than China deciding to shut off Rare Earths– something they could do only because they bought out, and then moved, the United States’ manufacturing:
In 1995, a shell company run by Chinese government-affiliated investors purchased Magnequench. They promised that the company’s factories and jobs would remain in Indiana. That didn’t happen. As soon as China learned the valuable trade secrets it needed to manufacture those magnets at home, the factories started closing and the jobs shipped overseas, as did America’s intellectual property and internal knowledge with the “know how” to make the magnets. By 2004, Magnequench’s last factory in Indiana closed for good.
Longtime Indiana Representative Peter Visclosky once observed, “we’re handing over to the Chinese both our defense technology and our jobs in the midst of a deep recession.” It wasn’t until 2010, when China had a near-monopoly on rare earths and cut off exports to Japan, that the United States began to acknowledge the problem staring it in the face. As one industry expert told the New York Times then, “we are going to be 100% reliant on the Chinese to make the components for the defense supply chain.”
Source: Bringing Rare Earths Back – Commonplace
