• United States
• China
• Christina Lu

August 11, 2025, 2:25 PM View Comments ()

Take a look at the U.S. military arsenal, and you’ll find that much of the United States’ firepower depends on rare earths—powerful materials whose supply chains are largely controlled by China. 

Every Lockheed Martin F-35 fighter jet, for example, is engineered with more than 920 pounds of rare earths. More than 5,700 pounds of rare earths underpin hulking Arleigh Burke-class guided missile destroyers, according to the consultancy Benchmark Mineral Intelligence, and each Virginia-class submarine requires more than 10,000 pounds of the coveted metals. 

“They’re in every form of defense technology,” said Gracelin Baskaran, the director of the critical minerals security program at the Center for Strategic and International Studies (CSIS), a Washington-based think tank. “They’re in warships, fighter jets, missiles, lasers, tanks, satellites, drones—in everything.”

The problem is that today, China overwhelmingly dominates global supply chains for rare earths, commanding about 85 percent of processing and more than 90 percent of magnet production. Beijing particularly dominates the separation of what are known as heavy rare earths, and it has wielded that leverage against the White House on top of earlier export bans of technologies for rare earth extraction, separation, and magnet production. 

Ever since U.S. President Donald Trump launched his trade war in April, officials from both countries have spent months negotiating Beijing’s exports of the powerful materials. But Beijing still maintains significant leverage. With trade negotiations underway, China is choking the flow of critical minerals, including rare earths, to Western defense companies, sparking delays and driving up prices, the Wall Street Journal reported.

“We’re effectively having to ask China’s permission to build our weaponry because they control the permanent magnet supply chain,” said Ashley Zumwalt-Forbes, a former U.S. Energy Department deputy director for batteries and critical minerals under the Biden administration. 

“That’s a very dangerous position,” she added. 

Despite their name, rare earths are not actually that uncommon. The grouping of 17 elements, which bear obscure names such as neodymium and lanthanum, can be found all over the world, although locating them in commercially appreciable quantities is more challenging. 

The United States was once one of the world’s biggest rare-earth producers. But as environmental concerns and financial challenges began to plague the U.S. mining industry decades ago, U.S. lawmakers saw the sector as one that should be outsourced internationally—even going so far as to close the U.S. Bureau of Mines, a key research agency, in 1996. Today, the United States is home to just one operational rare-earth mine: MP Materials’ Mountain Pass mining and processing facility in California. 

At the same time that Washington pulled away, China leaned in, pouring immense resources and investments into its rare-earth sector over the course of decades. Now, the big challenge for U.S. lawmakers, and much of the world, is that China’s command over global rare-earth supply chains—and its resulting sway over prices—has made it difficult for anyone else to break into the industry. 

In April, China retaliated against Trump’s trade war by imposing export controls on seven kinds of rare earths and magnets. U.S. and Chinese negotiators agreed afterward to a 90-day truce that is set to expire on Tuesday. Ahead of that deadline, top U.S. officials stressed the importance of ensuring continued access to the powerful elements.

“We’re focused on making sure that magnets from China to the United States and the adjacent supply chain can flow as freely as it did before the control,” U.S. Trade Representative Jamieson Greer said in an interview with Bloomberg last Friday, referring to Beijing’s recent trade restrictions. “And I would say we’re about halfway there,” he added.

The U.S. Defense Department and Western defense contractors have long been aware of their rare-earth pressure points, and the White House has spent the past few years scrambling to tackle the challenge. During the first Trump administration, the U.S. leader aimed to strengthen critical mineral security by issuing an executive order to investigate the threat posed by the country’s critical mineral reliance on foreign adversaries and identify policy responses. Trump also increased funding for domestic rare-earth firms. 

His successor, President Joe Biden, focused on expanding the country’s rare-earth stockpile and used the Inflation Reduction Act to encourage new domestic mineral supply chains, namely by tying hefty tax incentives to materials sourced from the United States or free trade partners. Both Trump and Biden have also invoked the Defense Production Act, a Cold War-era law, to expedite domestic production of critical minerals for national security reasons by prioritizing such efforts and mobilizing new funding. 

But after decades of neglecting its own industry, the United States remains deeply vulnerable to Beijing’s grip.

“More than 95 per cent of rare earth materials or metals come from, or are processed in, China. There is no alternative,” Raytheon chief Greg Hayes declared to the Financial Times in 2023. “If we had to pull out of China, it would take us many many years to re-establish that capability either domestically or in other friendly countries.”

The Pentagon is betting that it can help turn a new page. In recent years, the Defense Department has poured almost $540 million into critical minerals projects, Reuters reported. But the Pentagon is now going even further, namely by recently inking a multibillion-dollar deal that would make it the biggest shareholder in MP Materials, the aforementioned firm that operates the country’s only operational rare-earth mine. 

With the Pentagon’s support, MP will build a rare-earth magnet factory, which it expects to launch in 2028. The U.S. government will purchase the factory’s output and establish a price floor to shield the company from financial pressures. 

The deal represents one of the clearest examples of state intervention in the critical minerals sector and is a triumph for MP Materials, which has for years sought to carve out a bigger stake in the global market and will now be backed by an unprecedented degree of federal support. 

“We are up against China, which has a very interventionist minerals policy in production and processing, in offtake for downstream industry,” said Baskaran of CSIS. “For the United States to be competitive with China, [it] is going to require a more interventionist model. And this is a big step toward countering China.” 

By 2027, the Pentagon will also require its defense contractors to only purchase rare-earth magnets that do not contain China-sourced minerals, according to the Wall Street Journal. 

Yet even with the Defense Department’s efforts, big challenges remain, and any efforts to forge a new mine-to-magnet supply chain will take time. Engineering new supply chains isn’t just a question of finding a new mine; it requires an entire ecosystem of separating and production capabilities, all of which China has a decades-long advantage in. 

“The disparity in the intellectual firepower in China versus the United States with respect to these metals is pretty severe,” said Chris Berry, the president of House Mountain Partners, an independent metals analysis consultancy.

And at the same time that Washington’s efforts are picking up speed, Beijing, too, is only moving full speed ahead. China is continuing to make inroads in Myanmar, which is rich in rare-earth mining, and the Chinese government is reportedly starting to create a formal catalog of its own rare-earth specialists to ensure their technical expertise is not shared abroad. 

Last year, China saw its highest number of overseas mining acquisitions in more than a decade, according to the Financial Times. 

“China is not doing business differently—they are just doing more of it,” Baskaran said.