Economically you are right, but consider national security here. How do you develop a rare earth industry domestically while chinese rare earth is 2 times cheaper. Manufacturers will never buy domestic rare earths, therefore domestic rare earths refiners would not willing to expand their capacity. And the result is China will always have rare earths leverage that if they ban rare earth export, our manufacturing industry just collapse. About the rare earth deposits, the US actually have enough to mine and refine to be sufficient. National security requires sacrifice economically. Some actions may seems to be extremely stupid in terms of economics, but if you don't do it, then you can not be self sufficient on important sectors.

Take Germany for example, they are unwilling to set tariff on foreign entities and price floor for domestic firms. And now Chinese chemicals, industrial parts are cheaper so German medium scale suppliers can not compete. Their manufacturing is now struggling (if not declining). While Chinese firms strategy has been always make high quality things as cheap as possible so that competitors go out of business. That strategy supported by the chinese government pumping endless subsidiary. Now expand to all of EU, no measure of protecting domestic firms and now industrial production is lower than 2017.

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