Boy, talk about a wake-up call! Back in April 2025, China really shook things up by putting new export controls on a handful of rare earth elements and the permanent magnets they’re used to make. And if you’re wondering why that’s a big deal, just look around: these materials are the unsung heroes of pretty much everything, from the latest fighter jets and missiles to electric vehicles, wind turbines, and even the data centers that power our digital lives. By restricting the flow of these vital ingredients, Beijing wasn’t just showing off its industrial might; it was holding up a giant mirror to reveal just how vulnerable the US and the rest of the world truly are. This latest move by China is a stark reminder that they’re not afraid to weaponize our dependence on them.
Now, it’s not like this challenge just popped up overnight. For more than 15 years, the United States has known, deep down, that its critical mineral supply chains were far too concentrated, way too fragile, and dangerously exposed to China’s influence. Yet, through various administrations, both Democratic and Republican, we’ve dragged our feet, failing to act with any real urgency or a clear plan. And guess what? The consequences of that inaction are now hitting us hard, rippling through both our commercial and defense sectors.
Recently, after some talks in London, Washington and Beijing announced a new trade framework. The good news? China has agreed to resume approving export licenses for rare earths over the next six months. US officials have been pretty vocal about this “breakthrough,” but they’ve been pretty quiet on the details of what the US had to give up in return. That leaves us with some nagging questions: What exactly did the US concede? How will this deal actually be enforced? And perhaps most importantly, what happens when those six months are up?
Skepticism is running high, and for good reason. Ford, for instance, recently had to halt production at its Chicago plant due to a magnet shortage. That’s a real-world example showing that even brief interruptions can have serious consequences. A piece of paper isn’t a supply chain solution. Without transparency, timely approvals, and some solid long-term planning, this whole thing could easily turn into another diplomatic dance where we take one step forward and two steps back.
Even this limited breather comes with its own set of risks. Dozens of companies in Europe and North America have described China’s export license process as incredibly intrusive. We’re talking about firms having to hand over detailed production data, information on how their products are used, pictures of their facilities, customer names, and even transaction histories. Some have even been denied simply for not providing photos or documentation of their end users. Executives are calling this process “official information extraction,” which sounds pretty alarming. While companies are advised not to share sensitive intellectual property, holding back key details can lead to indefinite delays. For businesses involved in defense supply chains, the implications are even more concerning: valuable commercial intelligence could be used to map out competitors, mess with pricing, or help China push its own substitutes. This isn’t just about getting a license; it’s practically competitive surveillance. And until the US builds its own secure, independent capacity across the entire critical minerals supply chain, we’re stuck in this vulnerable position, open to both disruption and data risks.
This whole mess didn’t happen overnight. Many have seen this slow-motion train wreck coming for years. Back in 2010, China cut off rare earth exports to Japan during a maritime dispute. That was a clear warning shot, one the US observed but, frankly, just brushed off. Then, in 2014, the Obama administration won a WTO case against China’s export restrictions, but they mistakenly assumed that legal victory would stop further manipulation.
What Trump and Biden Have Done
The first Trump administration did identify rare earths as critical, but interestingly, they exempted them from the 2018 China tariffs. Perhaps that was an unspoken acknowledgment of just how dependent the US was. Biden, on the other hand, took the most structured approach we’ve seen to date, implementing Executive Order 14017, establishing the Critical Minerals Working Group, and funneling money from the IIJA and IRA. We even saw strategic partnerships like the Minerals Security Partnership emerge. But progress has been frustratingly slow, bogged down by permitting delays and inconsistent commitments from our allies.
The second Trump administration has come back with more aggressive measures, invoking Section 232, activating the Defense Production Act, and proposing significant funding increases in FY2026. A National Energy Dominance Council is now coordinating these efforts. Yet, even these measures, much like China’s six-month reprieve, still fall short of truly breaking Beijing’s stranglehold. And here’s the crucial point: the defense sector remains completely cut off, with no such licensing window available to them.
The recent G7 summit in Canada really highlighted how much is at stake globally. European Commission President Ursula von der Leyen directly accused China of “weaponizing” its control over key materials like rare earths, urging a united G7 response. The result? A G7 Critical Minerals Action Plan. While China wasn’t named specifically, the message was crystal clear. The plan commits G7 members to boost environmental, social, and governance (ESG) and traceability standards for key resources; mobilize capital for new mining and processing projects; and work together on innovations in recycling, substitution, and refining technologies.
Predictably, Beijing reacted with fury. The Chinese Ministry of Foreign Affairs dismissed the plan as “a pretext” for protectionism, claiming the G7 was simply trying to stir up confrontation because they were afraid of losing market share.
Now, Brussels is hinting that trade negotiations with Beijing are pretty much stalled, which means the chances of Chinese retaliation, especially against the EU, are growing. If China decides to double down, it risks pushing the EU, Japan, South Korea, and India even closer into Washington’s orbit—which is exactly what Beijing hopes to avoid.
China’s Dominant Position in Rare Earth Mining
The raw numbers are truly staggering. China accounts for roughly 70% of global rare earth mining, but an astonishing over 90% of refining capacity. And when it comes to neodymium-iron-boron (NdFeB) magnets—the ones found in everything from submarines to Teslas—China produces a whopping 92% of the world’s supply. This dominance isn’t some happy accident. China strategically subsidized processing, focused on global acquisitions across the entire supply chain, and can scale up production much, much faster than the West can even approve and issue permits for a single new mine.
Even US sites like MP Materials’ Mountain Pass and Round Top are still incomplete without downstream processing capabilities. The Department of Defense and Department of Energy have offered grants, and the FY2026 Trump budget aims to expand US mining capacity and secure access to critical minerals. But all these efforts still pale in comparison to China’s massive head start and its long-standing control over the entire sector.
China moved early and decisively into Africa and Latin America, partnering with governments in places like the Democratic Republic of Congo, Bolivia, and Chile, and investing heavily in ports, rails, and refining infrastructure. In stark contrast, US efforts on these issues have been piecemeal and focused more on “values,” prioritizing transparency and governance. While those are certainly important, they’ve delivered limited momentum on the critical mineral front. Even recent Memorandums of Understanding with Ukraine and the Democratic Republic of Congo remain, for now, largely symbolic, hindered by ongoing conflict and instability in those countries.
The London talks and recent trade deal bought us some time. But time without a clear strategy won’t bear fruit. China’s licensing regime is still firmly in place, and its demands for data haven’t let up. The defense sector is still locked out. Meanwhile, congressional threats to roll back clean energy and industrial policy funding could stall rare-earth projects just as they’re finally starting to gain traction.
This is a make-or-break moment. China is betting that America’s internal divisions—the constant tug-of-war between labor, industry, environmentalists, tribal nations, and political factions—will stop us from putting together the kind of unified, sustained effort needed to compete. They might be right. The US needs to prove them wrong.
Critical Minerals Are Geopolitical Power
The United States absolutely must start treating critical minerals not just as commodities, but as vital instruments of geopolitical power. China already does. Escaping their grip will take a lot more than just mine permits and short-term funding. It demands a coherent, long-term strategy to build a complete supply chain that includes not only our own domestic capabilities but also reliable allies and partners. From mining and refining to magnet production and recycling, every single link in that chain needs to be strengthened through targeted investment, sensible permitting reform, and strategic coordination.
A successful and sustainable policy demands commitment from one presidency to the next. And the US simply can’t afford to engage allies and partners only with rhetoric. Countries like the Democratic Republic of Congo, Chile, and Indonesia (among others) need sustained partnerships backed by real financing, technology transfer, and investments in critical infrastructure, not just our lectures on good governance.
The six-month export reprieve from China isn’t a solution—it’s a stress test. It’s going to reveal whether the US can finally focus and act, or if we’ll retreat back into complacency. Beijing is betting on the latter. Washington needs to respond with urgency, unity, and a strategy that truly matches the scale of this challenge. There’s still time, but not much.
What do you think will be the biggest hurdle for the US in building out its own critical mineral supply chain?