On June 25, local time, former U.S. Deputy Secretary of State Kurt Campbell said in an interview with Bloomberg TV that it would take “a generation” to reduce the U.S.’s partial dependence on China for rare earths and other supply chains.
Campbell emphasized that China and the United States have gradually realized that "China and the United States may be the two countries with the most economic, commercial and strategic interdependence in the world." Both sides feel "uneasy" about this dependence, but it is more difficult to "decouple" completely than imagined.
Campbell said, "Both countries are aware that the short-term challenges of decoupling are real, so it can be said that the two sides currently have a state of 'truce' and are willing to maintain a certain degree of stability in bilateral relations."
As for the impact of China's export controls on rare earths, Campbell said that the United States wants to diversify its rare earth and other supply chains, but it is "incredibly difficult." "This effort actually started during (U.S. President) Trump's first term and continued during the Biden administration, but it may take a generation to achieve the goal. We are still highly dependent on China in some aspects, such as rare earth magnets."
However, Campbell also said that it is "inaccurate" to say that China has the upper hand. In his view, certain areas in China can indeed cause a huge blow to the U.S. high-tech manufacturing industry, but the United States can also take measures to affect the Chinese economy.
He said, "We are all vulnerable, we are interdependent, and it is difficult to try to judge who is more vulnerable." If the situation escalates, the economies of both countries will be damaged, and the impact will not only be on the United States and China, but also Southeast Asia and other parts of the global economy.