September 15, 2025
AUSTIN – Almost six months into the trade war, the Trump administration is racing to wean America off its near total dependence on China for rare earth metals, essential to making everything from cars and fighter jets, to smartphones and data centres.
An F-35 fighter jet, for example, uses over 400kg of rare earth metals to enhance the performance of its weapons targeting systems, stealth abilities and other advanced on-board technologies.
Some submarines need more than 4,000kg of rare earths.
Such is the importance of these 17 lustrous and silvery-white elements, endowed with unique electronic, magnetic and optical properties, that they may determine who owns not only the modern economy, but also the weapons of modern warfare.
China’s global dominance of rare earths has undermined US President Donald Trump’s ability to impose economic sanctions on China. If Beijing cuts off supplies to the US, estimates are that America’s stocks will empty in less than 90 days.
China’s leverage will also impact Mr Trump’s ability to get European allies to act on his Sept 13 proposal that Nato place 50 per cent to 100 per cent tariffs on China for its import of Russian oil.
There is a good chance that Mr Trump’s call goes unheeded because Europe also imports large amounts of rare earths from China, which has the world’s biggest rare earth deposits.
It has mined them for years, building enviable expertise.
In 2024, for instance, China produced 270,000 tonnes of these crucial metals versus only 40,823 tonnes in the US.
The Asian giant refines more than 85 per cent of the world’s supply of rare earths, which it then turns into magnets, controlling 90 per cent of the world’s supply. China also dominates the production of equipment and chemical reagents needed to refine rare earths.
The US got a taste of the power China wields on rare earth supplies immediately after Mr Trump announced duties as high as 145 per cent on Chinese goods on April 2.
Two days later, China responded by restricting rare earth exports.
The impact was soon felt in the US. By May, Ford had to halt the production of the Explorer, a mid-sized sport utility vehicle, at its Chicago plant. Tesla chief executive Elon Musk expressed fear for his Optimus line of humanoid robots in a call to shareholders. Defence and aerospace contractors like Lockheed Martin were also hit.
A reprieve did not come until June, when the two nations shook hands over a trade framework.
The US kept tariffs in suspension, agreed to roll back curbs on the export of items like jet engines and offered up more student visas in return for a promise from Beijing to issue six-month licences for the supply of rare earths.
Shipments resumed, but at a much slower pace.
The US defence industry, however, remains cut off because China has totally disallowed military use of its rare earth magnets.
It is still not clear how things will pan out after the US-China trade truce expires in November.
The issue will come up at the Sept 14 talks between US Treasury Secretary Scott Bessent and Chinese Vice-Premier He Lifeng in Madrid.
And the widely anticipated summit between Mr Trump and his Chinese counterpart Xi Jinping towards the end of October may produce more certainty for US manufacturers.
But it may go any number of ways.
The plain truth is hard for Washington to swallow: China’s power over the rare earth market is unrivalled; comparable perhaps with the American advantage in high-end artificial intelligence chips.
Until the late 1990s, America wore the rare earths crown.
The Clinton administration’s decision to close down the Bureau of Mines was the start of a slow slide that saw the US shut down its mines over concerns that the process of extraction was highly polluting.
China, in the meantime, built up its supply chain under the vision of paramount leader Deng Xiaoping, who noted in 1992: “The Middle East has oil. China has rare earths.”
During his first term, Mr Trump signed an executive order in 2017 to increase US production.
The Biden administration increased funds for extraction and refinement facilities, and tried to rope in allies to make the supply chains more resilient.
In the nine months of his second term, Mr Trump has brought a new sense of urgency to the issue, unfurling an array of measures to support American miners and refiners.
Through a flurry of executive orders, he activated the Defence Production Act and opened the pipeline for funds for US companies to expand their mining and processing capacity, with efforts coordinated by the National Energy Dominance Council.
In July, the Pentagon announced it was investing US$400 million (S$513.2 million) in MP Materials, which owns America’s only operating rare earth mining and processing facility.
On Aug 26, the US released a draft list of 54 critical minerals – colour-coded to show the degree of vulnerability – and outlined a new model for assessing how potential supply chain disruptions could affect the US economy.
A plan to reassign US$2 billion from the Chips Act to fund critical minerals projects is also under consideration.
Mr Trump also tried to incentivise allies to join the campaign to secure the supply chain. Early efforts have yielded potential ventures in Greenland, the Democratic Republic of the Congo (DRC) and Saudi Arabia.
In late August, the US President sounded a note of confidence.
“We are going to have a lot of magnets in a pretty short period of time. In fact, we will have so many, we won’t know what to do with them,” he said.
Will the US succeed in building up a magnet supply chain independent of China?
It is not an easy goal to reach.
While it is now simpler and faster to approve new mines, the gap is yawning: The global average time to open a mine is 18 years; the time it takes in the US is more than 1.5 times that, at 29 years.
And the odds are formidable.
MP Materials is projected to produce 1,000 tonnes of neodymium-iron-boron magnets annually by the end of 2025, less than 1 per cent of the 138,000 tonnes China produced in 2018.
“There has been a very quick disbursement and trickle down to the agencies putting these executive orders in motion from the Department of Energy and the Department of Defence and all the agencies that permit these things,” said Ms Ruth Demeter, senior director of policy at the US Chamber of Commerce’s Global Energy Institute.
In the aggregate, Mr Trump’s actions are meant to signal to investors that the US is serious about its critical mineral supply chain, she said.
Mr David Abraham, a natural resource strategist, said that no country has a reliable supply line of all critical minerals – everyone relies on some sort of import, or overseas processing.
“The issue is: Can we get the right material, at the right price, to the right consumer, at the right time? And the answer is no,” added the author of The Elements Of Power, the first book to talk about the geopolitical power of rare earths.
“And, usually, that is because the costs of supplies in China are consistently less.
“The US does not have the expertise, materials, inputs, low-cost capital, equipment and existing supply lines to compete against China. While this is changing fast, China too is evolving.”
The US lags behind China in mining and processing technology. China has nearly 40 universities specialising in extractive metallurgy and another 40 in mineral processing. The US has none.
In addition, there are political considerations behind building a bigger rare earths industry.
Minerals tend to be caught in the cross-hairs of politics.
Democracy and mining do not pair well, according to Dr Gracelin Baskaran, director of the Critical Minerals Security Programme at the Washington-based Centre for Strategic and International Studies.
“One of the reasons that Democrats have historically scaled back mining efforts is because the majority of minerals domestically in the US are on Native American land,” she said, adding that China did not have to worry about the “ping-pong game” of policymaking.
But things are changing, with minerals becoming a focus of the Trump administration.
“It is one of the few areas where this administration has been shown to engage in multilateralism, seeking cooperation with Ukraine, Saudi Arabia and DRC,” she said.
There is also a growing political consensus on the issue.
Critical minerals have become a bipartisan priority, with legislation being co-sponsored by Republicans and Democrats.
When the Ford Explorer production stopped in May, things got very sticky for Democrats and labour unions.
“So, there is a joint understanding across the political spectrum that mineral security is really important for the health of our US economy, as well as our national security,” Dr Baskaran said.