The story of Achilles’ heel does not begin with an arrow. It begins with a mother who believed she could create invulnerability.
Thetis dipped her newborn son in the River Styx to make him immortal, holding him by the heel — the only spot the water never touched. Achilles grew up to become the greatest warrior of his time, with impenetrable armor and defeated enemies. Nobody cared about the heel. Why worry? Everything else worked so well.
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The industrial history of the United States follows the same script. Decades of semiconductor leadership, unrivaled aerospace manufacturing, and the most sophisticated defense supply chain in history—and beneath it all, a single exposed sinew.
The rare earths: the 17 chemically similar elements that make electric motors spin efficiently, keep missile steering fins stable at supersonic speeds, and are inside every F-35, every electric vehicle propulsion system, and every wind turbine nacelle. For years, almost no one worried about this. Everything else worked so well.
Analysts at McKinsey & Company have spent the last few years drawing the outline of this wound. The consultancy projects a deficit of up to 30% in the global supply of magnetic rare earths by 2035 — unless China drastically increases its production or the rest of the world sharply accelerates supply.
In the case of dysprosium and terbium, the heavy rare earths that prevent the demagnetization of magnets in electric motors and missile guidance systems, the numbers are even worse: producers outside China are expected to meet less than 20% of global demand for these two elements by 2035. Similar estimates come from CRU Group and Benchmark Mineral Intelligence.
The river used by Thetis was not magical. It was strategy.
How China came to dominate
Rare earths are not particularly scarce in the Earth’s crust — the name is misleading. What makes them irreplaceable is the fact that they are almost impossible to separate from each other and the surrounding rocks cleanly.
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The chemistry required is toxic, expensive and technically complex. China did not win the rare earths race by having more ore. He won by mastering refining—and by deciding decades ago that he wanted to do it.
This decision had a name. President Xi Jinping’s “dual circulation” doctrine — making the world dependent on China while protecting China itself from foreign dependence — found its proof of concept in rare earths and permanent magnets long before it became official policy.
“They didn’t get to this by chance,” economist Soumaya Keynes told Fortune earlier this month. “They studied these supply chains. They had a strategy to become world leaders.”
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Keynes and his co-author Chad Bown, senior researcher at the Peterson Institute for International Economics, defend this thesis in “How to Win a Trade War”, a book released this spring in the northern hemisphere. While the United States reinforced everything else, China studied its heel.
Achilles went to battle anyway. American industry too.
For a generation, Washington followed a version of Achilles’ logic: the armor was good enough. The United States poured billions into the Chips Act to expand domestic semiconductor production, but never forced anyone to buy the chips.
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“They didn’t force anyone to actually buy the chips that Intel would produce,” Keynes said. “And that was a problem.” The rare earth story repeats this structural flaw, but on an even greater strategic level: supply was funded, demand was assumed, and the chain never completely closed.
“Meaningful diversification will take longer than many imagine,” Michel Van Hoey, McKinsey senior partner in charge of the firm’s metals and mining practice, told Bloomberg earlier this month.
Any nascent rare earths industry in the United States is small enough that Beijing simply floods the market with cheap material and waits for competitors to give up.
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This tactic led to the demise of Molycorp — once considered the great hope of American independence in rare earths — whose Mountain Pass mine filed for bankruptcy protection in 2015, before the Pentagon fully understood what it had lost.
Chinese rare earths producers, many of them state-owned, are not seeking to maximize quarterly returns. They execute national objectives.
“These companies are not just maximizing profits,” Bown told Fortune. “They are achieving other goals on behalf of the Chinese government.”
Achilles had enemies who studied him. The United States has a rival that has studied the supply chain.
Washington finally moves
Then came the arrow.
China controls about 70% of global rare earth mining and nearly 90% of refining and processing capacity — the real bottleneck.
When Beijing imposed export controls on samarium, dysprosium and terbium in response to President Donald Trump’s tariffs last year, American automakers warned they were just weeks away from halting production lines.
A truce in November partially eased the flow. But new restrictions against Japan in early 2026, following statements by Japanese Prime Minister Sanae Takaichi about Taiwan, have sent another jolt to magnet supply chains that fuel everything from F-35 fighter jets to Ford F-150 Lightning pickup trucks.
The arrow, when it finally came, hit exactly the spot everyone had been warned not to worry about.
Mining veteran Mick McMullen summed up the situation to Fortune during a forum on critical minerals in Singapore in March: “Clearly, China is the leader, and the United States is far behind. It’s a little unbelievable that it took so long for everyone to realize that maybe we should be producing some of this stuff at home.”
Achilles, in the end, tried to keep fighting.
Washington began to react — aggressively, by its own standards. The Department of Defense is now the largest shareholder in MP Materials, operator of the only active rare earths mine in the United States, at Mountain Pass — the same California site abandoned by Molycorp.
The government signed an $8.5 billion rare earths deal with Australia in October, struck deals with Malaysia and Thailand and is reportedly considering redirecting $2 billion of Chips Act funding to minerals.
Trump expanded Chips Act tax credits from 25% to 35% and acquired equity stakes in private companies, including Intel — a piecemeal industrial strategy that Keynes and Bown describe as effective but overdue.
The problem remains the same: time. Extracting the ore is the easy part. The supply chain runs from mine to crusher, from leach tanks to solvent extraction columns, from metal reduction furnaces to sintering presses — each step requires a different facility, a different specialized workforce, and a different capital cycle.
The United States is, at most, two or three steps ahead. “We do not live in a perfect world,” said Keynes. Countries need to use “imperfect tools” to protect their interests and manage the consequences as best as possible.
The question is whether Washington can act quickly enough — or whether, as Keynes put it, “we are going to be stuck in this for a long, long time.”
McMullen told Fortune he doubts the gap can be closed within a single administration.
The myth, of course, ends on the battlefield. Achilles does not die because the arrow is powerful. He dies because the heel was always there and at some point someone with enough patience took aim at him.
Beijing was patient.
For this story, Fortune journalists used generative AI as a research tool. An editor checked the information for accuracy before publication.
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