JPMorgan Asset Management: Market Observations and Critical Minerals Analysis

Key Chapter Title List

1. Trump Administration Approval Ratings and the Prospects for Midterm Election Redistricting
2. Potential Impact of China's Critical Mineral Export Controls on the United States
3. Distribution of Chinese Industries with Low Export Dependence on the U.S.
4. Comparison of U.S.-China National Security Tools
5. The Historical Decline of the U.S. Critical Mineral Supply Chain: From Dominance to Dependence
6. Actual Impact of U.S. Tariff Policies and Price Transmission Mechanisms
7. The Greater Risk to U.S. Economic Growth: Labor and Immigration Policies
8. Analysis of Debt and Cash Flow Conditions of AI-Related Enterprises
9. Logical Flaws in the Rising Proportion of Central Bank Gold Reserves
10. Observations on Gender Differences in Psychotropic Drug Usage Rates
11. Disclaimer and Regulatory Information

Document Introduction

This report, authored by Michael Cembalest of J.P. Morgan Asset Management, aims to provide a cross-disciplinary analysis of several core geopolitical economic and supply chain risks facing the United States, based on the latest policy developments and market data from 2025. The report abandons traditional linear narrative in favor of a modular, "mad-libs" style structure, guiding readers to focus on seemingly discrete yet interconnected issues such as tariffs, immigration, critical minerals, corporate debt, central bank gold, and societal health, while offering data-driven professional judgments.

The report begins with an introduction to the U.S. political landscape before swiftly transitioning to substantive economic and security issues. The core section focuses on the critical mineral export control measures announced and expanded by China in 2025. The report details the types of controlled minerals, the U.S. net import reliance on them, and the share of imports from China, noting that reliance on rare earth elements such as dysprosium, holmium, and erbium is close to 100%. The new regulations extend control to products containing trace amounts of Chinese rare earths or manufactured using Chinese rare earth equipment, mimicking the U.S. "Foreign Direct Product Rule" used in the semiconductor sector. The analysis suggests that strict enforcement would have profound impacts on multiple core U.S. industrial sectors, including semiconductors, automobiles, aerospace, and defense. In contrast, the report uses data charts to show that the vast majority of Chinese industries derive a low proportion of their export revenue from the U.S., implying that China may possess greater resilience and retaliatory tools in this round of strategic competition than the White House anticipates.

The report traces the historical decline of the U.S. from self-sufficiency in critical minerals in the 1950s to its current high dependence on imports, attributing this to cost considerations, increasingly stringent environmental regulations, and China's concurrent strategic planning and capacity expansion. The author points out that resolving this dilemma requires reliance on strategic alliances rather than solely on domestic extraction, as the average approval period for opening a mine in the U.S. is approximately 29 years.

Beyond supply chain security, the report assesses the actual impact of U.S. tariff policies, noting that while tariffs are borne by U.S. importers and raise import prices, the final pass-through to consumer prices may be "manageable" due to high product markups and potential "misclassification" by importers. In contrast, the author identifies the greater risk to U.S. economic growth in the labor market. Citing data from the Dallas Fed, the report points out that slowing population growth and declining labor force participation have jointly lowered the "breakeven point" for job growth needed to maintain a balanced labor market, while net immigration is projected to fall to about half the average level seen between 2001 and 2022.

The latter part of the report shifts to micro-level corporate analysis and financial market observations. Regarding the debt issues of AI-related companies like Oracle, the author re-evaluates them using metrics such as Debt/EBITDA and Net Debt/EBITDA, correcting the misleading nature of a simple debt-to-equity ratio. Challenging the mainstream narrative that central bank gold purchases are driving up gold prices, the report uses counterfactual calculations to reveal that the rising proportion of gold in reserves is primarily due to the increase in gold prices, not the scale of central bank purchases themselves. Finally, the report mentions, with a somewhat wry tone, the significant gender disparity in psychotropic drug usage rates in the U.S. and links it to the impact of marital status on male mortality rates.

This report integrates multiple perspectives from political science, economics, supply chain management, and industry analysis. Data sources include the Pew Research Center, Gallup, the U.S. Geological Survey, the International Monetary Fund, and several specialized research institutions. It provides policymakers, investors, and geopolitical analysts with an in-depth, cross-disciplinary assessment based on cutting-edge developments from the second half of 2025.