Trump faces setbacks in rare earths independence efforts as China tightens grip

The US wants to break free from China’s stranglehold on rare earth elements. China, predictably, has other plans.

In June 2026, Beijing added at least 10 US companies to its export control list, including two of the most prominent players in America’s rare earth ambitions: MP Materials and USA Rare Earth. The move effectively cuts off these firms from importing the very materials they need to build the domestic supply chain Washington has been championing.

The scale of the problem

China controls roughly 70% of global rare earth mining. That number alone is daunting, but it understates the real leverage. Beijing’s dominance in processing, the stage where raw ore gets turned into usable materials for magnets, batteries, and defense systems, is even more pronounced, approaching near-total control.

Rare earth elements aren’t exactly household names, but they’re in practically everything that matters. Permanent magnets made from neodymium and dysprosium power electric vehicle motors, wind turbines, fighter jet guidance systems, and the tiny vibration motors in your phone.

The Trump administration has tried to counter this dependency with serious money. The Export-Import Bank has issued $14.8 billion in letters of interest for critical minerals projects. The Department of Defense has kicked in additional funding to accelerate domestic production capabilities.

In practice, mines don’t open on a political timeline. Experts consistently warn that new mining and processing operations will take years to reach meaningful scale.

A truce that barely holds

After a Trump-Xi summit in October 2025, the two sides negotiated a temporary truce on rare earth exports. China eased some restrictions, and the US got a window to continue importing materials while it worked on alternatives.

That truce was still under consideration for extension as of May 2026. But even during the supposed ceasefire, heavy rare earth shipments from China remained markedly reduced.

Heavy rare earths, the subset that includes elements like dysprosium and terbium, are particularly critical for high-performance magnets used in defense applications. They’re also the hardest to source outside of China. Light rare earths like cerium and lanthanum are more geographically dispersed, but the heavy end of the periodic table remains Beijing’s trump card.

The long road to domestic supply

The US isn’t sitting idle. MP Materials operates the Mountain Pass mine in California, the only significant rare earth mining operation in the country. The company has been working to build out processing capabilities domestically, an effort that would break the current pattern of mining ore in the US and shipping it to China for refinement.

Other projects are taking shape in Texas and Oklahoma. Internationally, the US has been courting partnerships with Australia and Greenland to diversify sourcing. Australia’s Lynas Rare Earths is one of the few non-Chinese companies with meaningful processing capacity.

The automotive sector is already feeling the pinch. China’s export restrictions have impacted vehicle production, particularly for electric vehicles that rely heavily on rare earth permanent magnets for their drive motors.

Defense contractors face an even more uncomfortable calculus. The F-35 fighter jet uses approximately 920 pounds of rare earth materials. Missile guidance systems, satellite communications, and submarine sonar all depend on these elements.

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