Unhedged Podcast Summary
Episode Title: Rare earth quake
Date: October 16, 2025
Hosts: Katie Martin, Rob Armstrong, Hakyung Kim
Produced by: Financial Times & Pushkin Industries
Episode Overview
In this episode, the Unhedged team dives into the world of rare earth elements, unpacking their geopolitical importance after China announces export controls. The conversation covers what rare earths are, why China dominates their processing, and the ripple effects on global markets and trade wars, especially in the context of former President Trump's tariffs. The hosts use their signature wit to make sense of these complex topics for listeners who want to "blag" their way through a rare earths-related conversation.
Key Discussion Points & Insights
1. Rare Earths: Quiz & Introduction
(01:18 – 03:02)
- Segment: Hosts open with a playful quiz where Katie tries to stump Rob and Hakyung with real and made-up rare earth element names.
- Notable quiz items: Prasiodemium, Terbium, Lutetium – highlighting both real and invented names.
- Key Point: Many rare earths are central to modern technologies like magnets, cancer treatments, petroleum refining, optics, EVs, and electronics.
Quote (Katie Martin, 03:04):
“All of these things are like, you know, super, super important in a super wide range of different electronics and all the rest of it.”
2. China’s Export Controls – What’s Happening?
(04:25 – 06:06)
- Explanation:
- China announced export controls on rare earths, shaking markets and prompting political responses, notably from Donald Trump.
- Despite their name, rare earth elements aren't actually rare but are dirty and costly to mine and process.
- The West’s strict environmental regulations led to outsourcing production to China, which prioritized low-cost, high-volume output and looser regulations.
Quote (Hakyung Kim, 04:39):
“They’re not very rare at all. You can pretty much just drill a hole anywhere in the world and get these rare earths. But the thing is, China has this incredible advantage…in mining…[and] processing them.”
Quote (Katie Martin, 05:23):
“They’re filthy dirty. To get out the ground and to process. Right. This is a very mucky business.”
3. The Market Reaction & Trump’s Trade Tactics
(06:06 – 08:30)
- Market Impact:
- China’s saber-rattling led to volatile, swift market reactions.
- Trump responded with threats of steep tariffs (“100% tariffs”), which the market took seriously, causing the administration to quickly backpedal.
Quote (Rob Armstrong, 07:22):
“It was very violent. It responded very specifically to Trump’s truth social post saying, I’m going to put 100% on…[the administration] had to walk back its comments.”
- Big Ideas:
- The situation shows Trump isn’t done with tariffs; trade policies can shift erratically.
- Assumption that China lacks economic leverage is a mistake—they “have plenty of cards.”
Quote (Katie Martin, 08:30):
“Trump is not done with his tariffs…he can just jack these things up and down whenever he wants…And we should never fall into the trap of assuming that China has no cards here. They have plenty…and this is a really big one.”
4. Elasticity of Supply: Can China’s Leverage Last?
(09:13 – 12:44)
- Discussion:
- If rare earths are abundant, why is China such a critical supplier?
- While the elements are widespread, opening new mining/processing is slow (decades in the US, per Hakyung).
- China's dominance is due to scale, cost, and technological/process know-how that it guards closely.
- The West is aware and investing in alternative sources (Canada, US, Australia), but supply expansion is slow and constrained by regulations.
- If rare earths are abundant, why is China such a critical supplier?
Quote (Rob Armstrong, 09:13):
“One of Armstrong’s basic beliefs about economics is never underestimate the elasticity of supply. If you make something scarce…new supply turns up. And that seems to be happening.”
Quote (Hakyung Kim, 12:10):
“In the U.S. as it stands right now, it takes around nearly three decades to get approval for somewhere to mine.”
5. Wider Economic and Policy Trade-Offs
(11:05 – 13:07)
- Choices for the West:
- Continue dealing with China ("art of the deal") vs. relaxing regulations to enable domestic mining, with serious environmental risks.
- Nationalism (self-sufficiency) vs. global production distribution.
Quote (Rob Armstrong, 11:22):
“We lived in a world where there was a sort of distribution of production…But under nationalism, everybody’s got to make everything, or at least everybody’s got to make all the really important stuff for themselves.”
6. Outlook: Will the Standoff Continue?
(13:07 – 14:22)
- Prediction:
- Rob argues Trump’s pattern is to escalate but ultimately compromise before truly deep pain hits.
- China similarly has little interest in a full-blown trade war.
Quote (Rob Armstrong, 13:07):
“Trump is not strongly committed to much of anything and if you put pressure on him, he will come to an accommodation. And that’s the process we’ve seen.”
Quote (Hakyung Kim, 14:05):
“China has a very big card with this, but…they don’t want 100% tariffs on their goods either. So I think both sides are very aware of this fact.”
Notable Quotes & Memorable Moments
- “None of us know what any of these funny rocks are.” – Katie Martin (04:25)
- “It’s just a pain in the house to get.” – Rob Armstrong on rare earths (10:50)
- “Don’t head out into your garden and try and find lutetium. But if you do, let us know.” – Katie Martin (14:33)
Timestamps of Key Segments
- 01:18 – Rare earth quiz (Prasiodemium, Terbium, Lutetium)
- 04:25 – Explanation of China’s rare earth dominance
- 06:06 – Trade negotiation posturing and market reaction
- 09:13 – Elasticity of supply and challenge of shifting away from China
- 11:05 – The trade-off: self-sufficiency vs. environment
- 13:07 – Predictions regarding Trump, China, and ongoing standoff
- 14:52 – Long/Short segment (off-topic, ends main discussion)
Tone & Style
- Casual, witty, and irreverent banter (“Don’t head out into your garden and try and find lutetium.”)
- Clear explanations for non-experts
- Frequent playful jabs at both Trump’s unpredictability and market overreactions
- Cohesive group with strong chemistry and a knack for demystifying finance buzzwords
Conclusion
This episode provides an accessible, insightful exploration of rare earths’ real importance and their role in the ongoing US-China economic rivalry. With colorful analogies, a fun chemistry quiz, and pragmatic economic takes, Unhedged helps listeners understand why obscure elements suddenly dominate headlines—and what it means for markets and policy.