The Trump administration's proposed minerals consortium is the latest iteration. Sold as a necessary response to dependence on China for the processing of rare earths and other critical minerals, it promises coordination, investment, and independence. What it will deliver instead is distortion, waste, and a fresh round of politically-driven malinvestment.

There is, to be sure, a kernel of truth animating the policy. The United States and its allies do rely heavily on China for refining capacity in rare earth elements and other inputs essential to modern industry. But this dependency did not arise by accident, nor is it evidence of "market failure." It is the result of decades of global specialization—firms locating production where it is most efficient, given costs, regulations, and accumulated expertise. Washington's answer is not to understand this process, but to override it.