With trade tensions heating up, China is preparing to go nuclear with a move to cut off exports of rare-earth materials, and the operator of the only U.S. rare earths mining company says if we can’t beat China in this game, no one can.

“There’s no refining capacity in the world outside of China.”

“We’re it,” MP Materials co-chair James Litinsky said Thursday on CNBC’s Squawk Box. “If we can’t be economic, there’s no hope for the U.S. industry.”

MP Materials owns the Mountain Pass Mine in California, which ships almost 50,000 tons of rare earth concentrate each year … to China for processing. So the only U.S. mine digging for rare earths doesn’t even process them, and sends them directly to China, where they are slapped with tariffs.

“There’s no refining capacity in the world outside of China,” Litinsky said.

China has imposed 25% tariffs on rare earth imports during the trade war, making MP Materials the lone U.S. company suffering in the tariffs battle on the rare earths front.

On the export side, China is threatening to cut off rare earths bound for the U.S. after President Donald Trump blacklisted Chinese telecom giant Huawei from American networks and barred it from using American tech.

According to Reuters, the Pentagon recently sent a report to Congress on what to do about the rare earths market and where to get them outside of China, which supplies more than 70% of the planets rare earths.

As we covered here on Money & Markets, billionaire Bridgewater founder Ray Dalio said China blocking rare earths from the U.S. would be a “major escalation” in the festering trade feud, calling the materials a “critical import that American companies don’t produce and need to get from China.”

Litinsky said Mountain Pass should be self-sufficient of China by next year, when it should be able to process its own separated rare earths.

“We’re talking to the government and hoping they’ll help us,” Litinsky said, “but we’re not counting on it.”