BERLIN—Economic security is top of mind for governments around the world. But it is mostly the largest economies, especially the European Union and the United States, that are implementing concrete measures aimed at bolstering it, whether by forcing their economic partners to alter their behavior or finding alternatives. For smaller economies, the only real option for reducing vulnerability to bullying and coercion is diversification.
China will probably not impose a rare-earth embargo, but it will keep the specter of one alive. And the West will probably not achieve self-sufficiency in this critical sector, but it will keep seeking to reduce its vulnerability to a supply shock through expensive capacity duplication and stockpiles.