> China currently dominates the production of rare earths and the US doesn't have sufficient reserves, but Australia does, so higher tariffs on China than Australia create an incentive to move mining operations to Australia which breaks China's lock

There are "sufficient reserves" (known rare earths in the ground) across the globe and the US absolutely has large reserves.

> to move mining operations to Australia which breaks China's lock

There are already mining operations in Australia delivering raw concentrates in bulk to China. Again, not a shortage of mining operations or a shortage of reserves in the ground.

It's the concentrate processing that China invested time and capital in decades past - every other country about the globe (save for Malaysia, to their regret) figured they'd leave the acres of acid ponds and low level radioactive waste to the Chinese.

Now the US wants Australia to take that on, and that's a deal with the devil for Oz while the current POTUS cannot be trusted to hold up any deal.