The Trump administration is reportedly weighing two proposals to remove China from critical U.S. supply chains. One option involves negotiating a rare earth mineral trade deal directly with the Myanmar junta. The other, and potentially more strategic, approach is to bypass the junta entirely and engage with the Kachin Independence Organization (KIO), a powerful ethnic armed group that controls resource-rich territory and has been fighting the junta since it nullified Myanmar’s democratic election and seized power in 2021.
Engaging with the junta risks legitimizing a brutal regime responsible for widespread atrocities, including airstrikes and ground assaults on civilians, hospitals, schools, refugee camps, and villages. Signing a deal with the junta could be perceived as endorsing its rule. In contrast, partnering with the KIO would send a powerful signal that the United States recognizes the de facto legitimacy of the revolutionary forces now functioning as local governments across much of the country.
However, any attempt to redirect rare earth exports away from China would likely trigger backlash. Most of Myanmar’s rare earths currently go to Chinese markets, and Beijing would almost certainly pressure the KIO to block such a deal. The junta, too, may respond aggressively, by escalating military attacks on Kachin-held areas or attempting to obstruct exports.
Still, for the people of Myanmar, any action that challenges China’s economic dominance and undermines the junta’s power would be a welcome development. China not only profits from rare earth extraction in Myanmar but also helps sustain the junta’s war against its own people. Breaking that link, both economically and symbolically, would mark a significant step toward weakening a regime responsible for daily violence and repression across the country.
Myanmar, particularly Kachin State, has become a key node in the global supply of rare earth elements (REEs), which are essential for high-tech, defense, and renewable energy industries. Since 2021, the Kachin Independence Organization (KIO) and its armed wing, the Kachin Independence Army (KIA), have taken control of major mining areas near the town of Pangwa, along the China-Myanmar border. Once dominated by a junta-aligned warlord who permitted opium cultivation and logging in exchange for taxes, the region has since been transformed by a rare earth boom fueled largely by Chinese investment and demand.
Today, Kachin-controlled mines produce nearly half of the world’s heavy rare earths, particularly terbium and dysprosium, used in electric vehicle motors, wind turbines, and other advanced technologies. China, which controls over 80% of the global rare earth supply chain, increasingly relies on Myanmar for these critical elements after cracking down on illegal domestic mining and tightening environmental laws in 2015. Myanmar now accounts for more than 57% of China’s rare earth imports, due to lax regulations and production costs up to seven times lower than in China.
This growing dependency has created mutual leverage. As the Kachin Independence Army (KIA) continues its campaign to bring all of Kachin State under revolutionary control and liberate its people from junta rule, China has begun pressuring the group to protect its own interests. Beijing recently warned the KIA to halt its offensive to seize Bhamo, a strategic logistics hub, threatening to cut off rare earth imports if the attack continued. Bhamo is a key transit point for rare earth shipments from Myanmar to Chinese processing facilities, underscoring its critical importance to both the resistance and China’s supply chain.
China dominates the global rare earth industry, controlling 60–70% of global production and nearly 90% of refining capacity. It holds an even tighter grip on downstream processing, with over 85% of the world’s capacity, especially for heavy rare earths like dysprosium and terbium, and light ones like neodymium and praseodymium. This monopoly is the result of decades of strategic investment, state subsidies, and a willingness to operate at a loss to undercut foreign competition and maintain market control.
Over the past eight years, two-thirds of China’s annual imports of rare earths, especially heavy rare earths, have come from Myanmar. This arrangement allows China to externalize the environmental damage while sustaining its global dominance.
For the United States, dependency on China represents a clear national security vulnerability. Rare earths are essential to a wide range of defense systems, from F-35 fighter jets and Virginia-class submarines to smart bombs and radar systems. An F-35 alone contains over 900 pounds of rare earth materials, while a single destroyer or submarine uses several thousand pounds.
China has already demonstrated a willingness to weaponize supply chains, restricting rare earth exports in response to U.S. tariffs. If Beijing chose to escalate, it could cripple key sectors of the U.S. defense and manufacturing base. Ending reliance on China, and by extension, on Chinese-controlled supplies from Myanmar, is therefore a strategic imperative.
Partnering with the Kachin Independence Army (KIA), which now controls mining sites responsible for roughly half the world’s heavy rare earth output, offers a rare opportunity. Such a deal would not only weaken China’s monopoly and disrupt a supply chain routed through a politically unstable war zone, but also support Myanmar’s democratic resistance by legitimizing one of its most capable revolutionary forces.
By shifting supply chains away from China and toward trusted or neutral partners, the U.S. could begin to rebuild strategic autonomy in defense and technology. And in the process, it could help weaken two authoritarian regimes, Beijing and the Myanmar junta, whose power is sustained by the rare earth trade.
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