Team,
This is the third and final part of my recent in-studio conversation with Steve Bannon on War Room.
China has weaponized rare earths and rare earth magnets, which are used in virtually everything, from cars to F-35s. Over decades, China used predatory models to gain control of the rare earths industry, dumping product to manipulate markets and buying up related factories around the world.
Communist China’s weaponization of rare earths and many other things has shown the U.S. and the rest of the world exactly who those people are, what they’re willing to do, and what their agenda is.
As I note during the conversation, I wrote about China’s weaponization of rare earths against Japan in my book “Crouching Tiger: What China’s Militarism Means for the World.”
In “Crouching Tiger,” published in 2015, I detail, among other topics, China’s three nonkinetic warfares: psychological warfare, media warfare, and legal warfare, also known as lawfare.
With regard to China’s psychological warfare, I wrote:
The goal of [psychological warfare] is to deter, demoralize, or otherwise shock an opponent nation and its civilian population and thereby discourage the opponent from fighting back. As [University of Cambridge professor and former White House advisor Stefan] Halper describes the scope of China’s psychological warfare: “It employs diplomatic pressure, rumor, false narratives, and harassment to express displeasure, assert hegemony and convey threats.” Halper notes further that “China’s economy is utilized to particular effect.”
Thus, for example, when China imposes an economic boycott on Japan for rare earths or bans Chinese tourism, it hopes to coerce a Japanese populace that is hungry for prosperity and struggling with economic stagnation into acquiescing to China’s territorial demands regarding the Senkaku Islands.
Here’s how we’re beating China on rare earths.
The traditional rare-earth production process is incredibly environmentally destructive. You’ve got to essentially run mountains of dirt through all sorts of nasty chemicals.
What we’re doing now is using innovation and new technology, including our work with two small companies—ReElement Technologies and Vulcan Elements—and one big company.
ReElement has an innovative process that is able to take both material from mines and recycled material and turn it into oxides. Vulcan Elements then uses those oxides to make rare earth magnets.
This process is like the critical-minerals sector equivalent of fracking in the energy sector. It’s the same kind of innovation that could lead us to strategic critical mineral dominance, similar to how we’ve built up strategic energy dominance.
The new rare earths process is very kind to the environment and uses small spaces instead of big spaces. It’s fast and it’s cheap.
We are using innovation to beat China across the rare-earths supply chain.
I always enjoy reading your comments. Please share this with a friend.
Peter
TRANSCRIPT
STEVE BANNON: The White House. They said you got to get back to work. You’re not going to — you’re only getting paid for half a day. Okay.
DR. NAVARRO: This is work.
BANNON: No—okay.
DR. NAVARRO: This is called messaging our economic plan, Steve, because nobody else will in the press. Gee whiz.
BANNON: The War Room Engine Room, which is a group of people that kind help us with the show, and they said getting—nailing down Navarro is harder than mercury. And they didn’t mean mercury in retrograde. So, hang on. Rare earths. You’re the guy, the lead guy with the President on rare earths. You and Jamieson Greer, I think. What are we doing?
DR. NAVARRO: Okay. So, yeah, this is a—okay, so, Communist China—let’s be clear about that—decides to weaponize rare earths and magnets. Now, why does that matter? Because they’re in virtually everything. Cars, F-35s, just everything our society operates on, they need magnets. And what China did with its predatory models going and basically buy off all the factories of the world—
BANNON: Yeah.
DR. NAVARRO: —dumping, and they control the whole thing. Okay.
BANNON: Corrupt the elites. Elite capture.
DR. NAVARRO: So, what we’ve been doing in warp speed—
BANNON: Yep.
DR. NAVARRO: —is addressing that problem.
BANNON: Warp speed’s a bad phrase for it. But keep going.
DR. NAVARRO: I’m happy to report here that what Communist China has done to weaponize rare earths and many other things at this point has been a favor to us in the world because it explains exactly who those people are and what they’re willing to do and what their agenda is.
BANNON: Okay.
DR. NAVARRO: And here’s how we’re beating them. Okay? The rare earth process, Steve, is incredibly environmentally destructive the way traditional technology does it.
BANNON: Yep.
DR. NAVARRO: I mean, you’ve got to, like, take mountains of dirt and run it through, like, all sorts of nasty chemicals to start—okay.
BANNON: Yes.
'DR. NAVARRO: So, what we’re doing is using new technology.
BANNON: Yep.
DR. NAVARRO: And there’s two companies that we have working—two small ones working with a big company.
BANNON: Yep.
DR. NAVARRO: ReElement’s over at the beginning, has an innovative process that’s able to take both material from mines and recycled material and turn it into what’s called oxides. And it’s the oxides then that Vulcan [Elements] uses to make magnets.
BANNON: Yeah.
DR. NAVARRO: Okay? And the punchline is—
BANNON: Magnets is where they had us—
DR. NAVARRO: —that process is like the fracking for critical minerals. It’s the same kind of innovation that could lead us to strategic critical mineral dominance. It’s very kind to the environment. It’s small spaces instead of big spaces to do it. And it’s fast, it’s cheap, and we’ve got hundreds of companies out there. We’re going to use innovation to beat them. And we’re going to have to do that across the chain.
BANNON: Okay. But how long—how long before the leverage goes away? A couple of years?
DR. NAVARRO: No. Germanium. Germanium.
BANNON: Yep.
DR. NAVARRO: Okay? By Q3 of this year, one company, ReElement, is going to have enough capacity to produce three times domestic demand here.
BANNON: Amen.
DR. NAVARRO: Think about that.
BANNON: So then we help our allies.
DR. NAVARRO: Three times. Okay? So, this is where things are headed. I’ll come back and talk more about it. The other thing I want to come back for a whole show on is what we’re doing on the border.
BANNON: Okay.
DR. NAVARRO: Establishing what I call the Detective Border with AI.
BANNON: Okay. Okay.
DR. NAVARRO: It’s like, it’s like groundbreaking.
BANNON: I’d rather have it with border guards. That’s okay. Hang on—because I’m a humans first guy. Hang on for one second. Take your No. 2 pencil out, I want you to write this down. Ancient civilizations like China and Persia that are still around and still kind of hold their thing, they’re pretty savvy, and they’re pretty tough, and they know leverage. So, the straits of Hormuz are no different than rare earths. Anything these people ever have—and what’s happened, and this is what President Trump has done, the forcing function to kind of, let’s get it on the table—the American elites and establishment went along for years. This rare earths thing, on Breitbart Radio, I’d have Erik Prince on here, when they were going to shut down the Japanese. And when they shut off Japanese because they had it in the East China Sea, they had this incursion of Chinese fishing boats, are all spy boats, the Japanese cleared them out. Next thing you know, ‘Hey, suck on this, no rare earths.’ That was back, I think in ’14.
DR. NAVARRO: Yeah.
BANNON: And I had Erik Prince come on there.
DR. NAVARRO: That was in my “Crouching Tiger” book.
BANNON: Yes. Which, you’re still the best guy on China. Our fight going forward is that they’re still going to look for every—they’re not our allies. The CCP’s not our allies and the Persians are not our allies. Our allies are bad enough. They’re trying to take advantage of us by, like, working around the sanctions.
DR. NAVARRO: Steve, let me tell you this. They just passed three new rules in China, basically, that give them the power to basically do anything they want to an American company operating in China if the American company does something that they don’t like. Do you know this?
BANNON: Yes. This is why I say you can’t have—it’s [China is] uninvestable. It’s uninvestable.
DR. NAVARRO: It’s outrageous.
BANNON: It’s not outrageous. It’s what they do.
DR. NAVARRO: Well, we are responding to this. Okay?
BANNON: I wouldn’t mind having that law here in the United States of America against all these foreign companies. Just saying. They’re nationalistic. You come in there—first of all, they don’t let you—you’ve got to do it in a joint venture, as you know. They’ll shut you down in a second. They steal your intellectual property.
DR. NAVARRO: I know. I understand.
BANNON: They run the deal like they run the deal. You can’t—and this is why it’s uninvestable.
DR. NAVARRO: The beauty of this, Steve, is that now the world finally sees that. Okay? Companies in China, I would wager to say that 99 percent of the companies—
BANNON: Do you think the world cares? Do you think the world cares?
DR. NAVARRO: About?
BANNON: Wall Street still—what do you mean? They’re banging on the door to get more money.
DR. NAVARRO: Here’s the reality. Like, companies, American companies in China are no longer doing additional investment there. There’s not a lot happening.
BANNON: Why did 50 guys go on the—the tech bros—
DR. NAVARRO: Oh, give me—
BANNON: The only reason, on AI, they’re competitive is we’re giving them the chips. We’re giving them the education. We’re giving them everything. We’ve built the entire ecosystem of AI.
DR. NAVARRO: We can have that conversation.
BANNON: We’ll get that for another day.
DR. NAVARRO: Yeah.
BANNON: Is my productivity—
DR. NAVARRO: I can—I bring you good news on rare earths. I bring you good news on the border, and then you want me to be responsible for everything else.
BANNON: Great news. Good news. Good—border, I need to know this is my border guard, border patrol’s down there.
DR. NAVARRO: Detective Border, man.
BANNON: I know, but AI, I want humans in those jobs. Anyway, that’s great. You’re amazing.
DR. NAVARRO: All right, brother.
BANNON: You’re amazing.
DR. NAVARRO: Humans are there. We just use the AI to enhance.
BANNON: Bonnie is really taking care of you. Married life is working out for you. It really is. You look amazing. You just don’t ever change.
DR. NAVARRO: Don’t ever change, brother.
BANNON: You look marvelous.
DR. NAVARRO: All right, well, we’ve got to get you back to your fighting weight.
BANNON: I am back to my fighting weight.
DR. NAVARRO: Maybe that’s the problem. [Laughs]
BANNON: No. I’m not back to my prison weight. I lost 30 pounds there. I should have just kept going with it.
DR. NAVARRO: Did you lose 30 pounds?
BANNON: 30 pounds. Yeah.
DR. NAVARRO: Wow.
BANNON: Walking every day. Working out every day.
DR. NAVARRO: Wow.
BANNON: We’ll talk, talk prison stories. We’ll talk prison stories next time.
DR. NAVARRO: We’ll have that conversation. All right, War Room. Let me just say this, Steve. War Room, you are blessed to have this guy because nobody else is doing that. And I mean that from the bottom of my heart. And I think he plays all the cold opens just to reinforce the fact that nobody else is doing this stuff because it’s all BS out there, man.
BANNON: No, no. We’ve got to get MSNBC. I’ve got to fire these guys up.
DR. NAVARRO: I’ve got to get Morning Joe in this chair one day. Would he come in? I don’t know.
BANNON: Mika.
DR. NAVARRO: Oh, Mika.
BANNON: It’s Morning Mika. We’ll get—no, Stephanie Ruhle’s got the nine o’clock show. She’s my girl. It’s a great show. It’s a great show.
DR. NAVARRO: She can come in.
BANNON: It’s got—she’s got Trump Derangement Syndrome, plus she gets a lot of Wall Street in there.
DR. NAVARRO: Is it true you’re going on The View next week?
BANNON: I get asked all the time. They asked me on The View a couple years. Not going to do that. Too much Trump hate. Can’t do that. Too much Trump hate. Thank you.
