China has stopped exporting rare earths to everyone, not just the U.S., cutting off critical materials for tech, autos, aerospace, and defense

From research to large scale trials i would expect building the processing industry to take at the very least a few years. And once things are in place, China can just reopen the floodgates and give these new refiners a hard time, unless they are heavily protected by their government then.

So it requires a dedicated long term strategy to counteract, which will take some years. Also in the meantime all dependent industries are suffering big-time while China can still export the finished products and further strengthen their industries.

In terms of economical power this move is much stronger than Trumps tariffs and there is no rewards to be expected for countries who stick it out for the US. The US has already made it clear that it will just make you suffer more, the more you give in to them.

It's perfectly possible to do in the US, just costs a bit more. So, capitalism being what it is, that work got outsourced so the vultures could see higher numbers.

throwing a wrench into the US industry right now is a pretty good deal.

This is the part I don't really get - they've spent decades working to control these resources, and I can't really see what benefit they get from this that offsets that time and effort.

Manipulating the flow and the prices makes sense. Cutting it off entirely just to participate in a dick-measuring contest with the US really doesn't make any sense. Nations are already looking at moving their supply chains especially for electronics after all the COVID disruptions. Encouraging those nations to go looking elsewhere for the entire supply chain just loses you business and influence, no matter how much short-term cost you inflict.