The Chinese military strategist Sun Tzu said that it can never be known when, where or if the enemy will attack, so one’s position must always be unassailable. In the ongoing trade war with China, America’s is not.

The United States’ near-total reliance on China as a supplier for vital rare earth minerals has left the Trump Administration vulnerable. There’s a real possibility China might weaponize its global stranglehold on the sector, and the president is preparing for the worst. This week, he invoked the Defense Production Act, ordering the Defense Department to take measures to increase the supply of rare-earth magnets critical to arms technology.

Used in everything from iPhones and electric cars to MRI machines and F-35 fighter jets, rare earth minerals are essential to national defense and high-tech industries. In spite of their misleading name, they’re found in abundance almost everywhere, but the facilities to mine and process them are far less common.

Rare earths are embedded in other minerals and separating them is an intensive process that creates a lot of pollution. While China holds the world’s largest reserves, its real advantage lies in its willingness to assume the high environmental costs that come with processing. China currently holds an 80 percent share of the market globally and supplies the roughly same proportion of US rare earth imports.

When it comes to rare earth, the United States needs China more than China needs it. The tariffs that have been passed thus far seem to bear this out.

The Chinese government slapped a tariff of 25 percent on the United States’ sole remaining rare earth mine in Mountain’s Pass, California, which ships the entirety of its annual output to China for processing. By contrast, Trump had originally planned to impose a 10 percent tariff on rare earth imports, but he scrapped it at the last moment—likely due to the adverse impact on domestic industry.

‘Don’t say I didn’t warn you’

The signs that China will soon use its rare earth leverage are everywhere. When Xi Jinping paid a high-profile visit to a rare earth processing facility in May and praised its “strategic value,” it was understood in the international press as a veiled threat. Later that month, a piece in People’s Daily took the veil off.

The official Party newspaper punctuated an editorial titled “US Should Think of China’s Rare Earth Card” with the phrase “don’t say I didn’t warn you”—the same words it used prior to China’s 1962 invasion of India.

If China ultimately decides to play the “rare earth card,” there’s little Trump can do about it. The United States simply doesn’t have the infrastructure and it’s not the sort of thing that can be thrown up over night.

China’s takeover of the rare earth racket began in the late 80s and early 90s, when the country started acquiring patents and related technology companies. In 1995 Congress approved the Chinese buyout of Magnequench, a producer of magnets for advanced guided missiles, and China shuttered its US facilities shortly thereafter.

Then in 1998, the National Defense Stockpile liquidated its strategic reserves while Rhodia Inc., the sole remaining integrated processor of rare earths, closed its giant plant in Texas and entered into a joint venture with a company in China.

Mountain Pass, America’s last remaining mine, has struggled to keep afloat in the face of fierce competition from China. The mine’s owner Molycorp filed for bankruptcy in 2015, but a joint venture between two investment capital firms and a Chinese minority shareholder restarted operations there last year under the name MP Materials.

With a raw rare earth output of 50,000 tons, Mountain Pass could conceivably make up a lot of the difference—if it had the capacity to process all of it. China still holds a virtual monopoly on that end. MP Materials announced in May that it aims to start a processing operation sometime in 2020, but can American industry make it that long?

Hoping for the best, preparing for the worst

Aside from building domestic capacity, there are a few other options for the United States in the event of a protracted rare earth siege:

• Recycling: It’s feasible to recover rare earth from e-waste, though recycling currently isn’t a significant source. The United States runs into the same complication as it does with processing: a lack of infrastructure. Only about a quarter of American e-waste is recycled domestically. The rest is exported. Up until very recently, much of it went to China. In the future, a green firms might take up the cause, but it does little to address the immediate problem.
• Replacement: When China pulled the same maneuver on Japan in 2010, some Japanese companies resorted to subbing out materials or developing new synthetic ones. The problem is that many of these alternatives don’t perform as well or else the companies would already be using them. At the same time synthetic materials cost time and money to develop, so they’re not necessarily a good solution in a pinch. Other Japanese companies did exactly what Trump fears: They just picked up stakes and moved to China.
• Alternative sourcing: Probably the best bet is to begin importing through the Lynas Corp, the world’s only other major non-Chinese player in the rare earth biz. It operates a major mine in Australia as well as several processing plants in Malaysia. Though it might not have the capacity meet all US rare earth needs, it might be enough to weather the storm when combined with government and private stockpiles.

The dragon plays chicken

There is also the possibility that this is a bluff—albeit a credible one. Even though China could easily eat the loss of some revenue from rare earth exports, there are plenty of reasons for it to not risk making this move.

While asserting China’s economic might would send a strong message to Trump, it could damage the nation’s relationships with its other trading partners.

As Lucy Hornby noted in the Financial Times:

The problem for China is that any new restrictions would cause damage to its recently developed industrial supply chains, which are dependent on foreign customers in the US, Europe and Japan. Any restriction would reinforce the notion that China was a risky source of supply.

China’s leadership is famously risk-averse, and it would be out of character for them to harm their long-term interests for the sake of a show of strength. It’s possible that this is all a play to get the Americans to the bargaining table.

If that’s the case, it worked. They’re headed there next week.