Exploring the divergence of rare earth trade networks with a global simulation model

TL;DR

This paper uses a global simulation model to explore how geopolitical actions and trade policies affect the international trade of rare earth elements, showing a shift toward regional trade groups.

Contribution

The study introduces a novel combination of global simulation modeling and network analysis to assess the impact of trade policies on rare earth trade networks.

Findings

Global rare earth trade patterns are becoming less concentrated and more regionalized.

Trade barriers reinforce regionalization, while liberalization encourages globalization.

Emerging exporters like Japan and Malaysia are increasingly mediating trade between China and the U.S.

Abstract

Rare earths are critical to high-tech and low-carbon applications. To protect national interests, countries increasingly adopt geopolitical trade actions among rare earth supply chains. Here, this study combines a global simulation model with network analysis to reveal how trade barriers, coalitions, and liberalization could reshape international rare earth trade networks. Results show an increasingly reduced concentration of global trade patterns, which have divided into more regional groups. In particular, Japan, Malaysia, and several Asian countries have formed a community increasingly mediating China–U.S. trade. Scenario analysis highlights the different role of actions from major exporters in shaping global networks, and trade barriers would intensify regionalization tendency, while non-discriminatory coalitions and trade liberalization can encourage globalization. Our analysis underscores the necessity of broader cooperation for a resilient rare earth supply chain.

•Dynamics of international rare earth trade under trade uncertainty are explored•Emerging exporters can have a notable impact on global rare earth supply•Trade barriers will reinforce the regionalization of the rare earth trade network•Trade liberalization can slightly foster globalization in the rare earth trade

Dynamics of international rare earth trade under trade uncertainty are explored

Emerging exporters can have a notable impact on global rare earth supply

Trade barriers will reinforce the regionalization of the rare earth trade network

Trade liberalization can slightly foster globalization in the rare earth trade

Earth sciences; Natural resources; Energy policy; Political science

Figures