Key Points:
The U.S. runs on rare earth magnets, and China makes 93% of them.
Beijing’s tactic isn’t to say no — it’s to never say yes. Permits just sit.
The Pentagon has two months of rare earth stockpile. That’s it.
Special Report: Man who called Tesla in 2014 now making NEW Elon call… (from Banyan)
A few days ago, a Ford line worker in Chicago told a reporter he doesn't know if his plant will run next month. The reason isn't the union. It isn't gas prices. It's a small black magnet, about the size of a quarter, that has to ship out of a warehouse in Ganzhou, China. And the paperwork to release it has been sitting on a desk in Beijing for four months.
That magnet goes in the power steering of an F-150. It also goes in your garage door opener. Your dishwasher. The little motor that moves your car seat. The cordless drill in your basement. I counted thirty of them in my own house last weekend. They are everywhere, and we don't make them.
These days, Trump shook Xi's hand at the Great Hall of the People. They talked for two hours and fifteen minutes. The cameras showed soybeans, Boeing planes, and Tim Cook giving a thumbs up. Markets barely twitched.
It was supposed to be confidential...
But it's become the worst-kept secret on Wall Street.
Right now, 21 banks are lining up to underwrite the $1.75 TRILLION deal - JPMorgan, Goldman Sachs, Morgan Stanley.
June is the target date for launch...
That gives everyday Americans a small window to get positioned before Wall Street insiders gobble up all the profits.
I can't stop thinking about what wasn't on camera.
China makes 93% of the magnets that move things in this country. Not most. Almost all. The Pentagon's stockpile of the rare earth stuff inside those magnets is about a two-month supply. Two months. That's not a typo. The same Pentagon that has eleven aircraft carriers has eight weeks of the powder that goes inside a guided missile.
Back in October, Xi promised to let the magnets flow again. He told Trump it was a deal. The factories cheered. Then the permits hit a desk in Beijing and stopped moving. Sixty days. Ninety days. A hundred and twenty. The industry has a name for it now. They call it "no rejection." That means China never says no. They just never say yes. The paper sits.
Ford figured this out the hard way last June. The magnets stopped showing up. They shut the Chicago Explorer plant for a week. A whole plant. One missing part the size of a quarter. The Alliance for Automotive Innovation sent the White House a letter that month warning that more lines were about to go dark. Trump read it. Everyone read it.
Here's what worries me. The handshake changes nothing about that desk in Beijing. Not one permit moved while Trump was eating duck. The leverage didn't fly home with him. It stayed.
We have one rare earth mine in this country. It's in California. There's a small magnet plant starting up in South Carolina and another one in Texas. Good people. Real work. But they will not be at scale for years. Not months. Years.
I get it. The news this week looks like a win. Trump came home with soybean orders and a friendly photo. The Dow ended the day calm. The talking heads said "managed competition" and went to dinner.
But every car on your street, every appliance in your kitchen, every tool in your garage runs on a part that one man controls. He can choke it anytime he wants. He doesn't have to start a war. He just has to keep the desk closed.
I don't think most people realize how thin this is. The cars get built or they don't. The fighter jets get the magnets or they don't. The garage door opens or it doesn't. And the decision is made in a building eight thousand miles from here.
Two months. That's the number I keep coming back to. Two months of magnets for the United States military.
The handshake is on TV. The leverage is in a filing cabinet in Beijing. And Xi has the only key.
More on this tomorrow.
— Lauren
Editor, American Ledger
