To counter the United States’ dependency on China’s critical earth minerals, the United States should place greater emphasis on developing domestic capacity for critical mineral processing and continue to build alternate supply chains through agreements with allies. Pursuing this dual-pronged approach will prevent the United States from experiencing a weakened defense industry and threatened, fragile supply chains due to China’s targeted restrictions on critical minerals from the U.S. This resource competition is largely driven by opposing geopolitical aims between the U.S. and China.
Context
Due to Chinese-U.S. geopolitical tensions, the United States’ access to critical rare-earth minerals is at risk. Critical minerals are essential to the operation of many important industries, now at risk; these minerals are used to produce batteries, high-powered magnets, wind turbines, semiconductors, lasers, optical devices, and sensitive military systems.[1] China is estimated to mine about 60% of the world’s rare earths and to produce 90% of the magnets from these minerals.[2] China not only mines the majority of the world’s minerals but also possesses unique production technologies that other countries do not have access to.[3]
Chinese and American competition for global dominance has threatened U.S. access to these minerals. Recent tensions between the two countries have escalated in response to the United States’ limitations on semiconductor exports to China and increased tariffs on China. Restrictions began in April 2024, 2 days after President Donald Trump announced extensive tariffs, and intensified in October 2024 with increased restrictions on minerals and Chinese production technology.[4]
More recently, in late October 2025, President Trump sought to secure alternative foreign sources of rare earths, concluding deals with Australia, Ukraine, Pakistan, Japan, Malaysia, and Thailand, among others. President Trump then met with Xi Jinping in South Korea, leading to a reduction of the harshest Chinese controls, some of which were instituted in early October 2025.[5] In early November 2025, a new trade pact emerged, granting increased export licenses, while the United States paused tariffs and canceled a planned levy on Chinese goods. These efforts have attempted to ameliorate the fragility of global supply chains. This is an important priority, as this issue primarily threatens U.S. defense supply chains.[6]
Cost-Benefit Analysis of Current Proposals
Suggestion 1: Maintain Current Status Quo by Developing Alternate Foreign Supply Chains and Domestic Production Capacity
Trump’s most recent deals with various countries to shift the United States’ supply of rare earths to alternative sources have set a new status quo, in which the United States seeks avenues to reduce its dependence on China. The United States has also made initial efforts to develop a domestic capacity to process these minerals, beginning with a plant in South Carolina.[7] This would reduce costs and, in the long term, increase U.S. dependence, even on foreign allies.[8] However, these efforts have only recently begun and should be significantly invested in for future success.
Circumventing dependence on China is a major pro of this proposed solution. Still, these kinds of investments into domestic production are costly and may take time to reap benefits. Furthermore, many current deals with foreign nations for the supply of rare earths are based only on Memorandums of Understanding, meaning they might not survive political shifts in those countries. Deals like these require many laws, large quantities of capital, and high technical expertise; they will take at least 5-7 years to develop with complete independence from China.[9]
Regulation and environmental damages are also potential challenges.[10]
Suggestion 2: Permanently Improve Relations with China Through Reduced Tariffs
An alternative solution is to improve relations with China to restore it as a reliable source of rare earths for the U.S. This would include reducing tariffs as a bargaining tool to reverse export halts on rare earths and processing capabilities. This solution may be promising, as moves have already been made in this direction, suggesting a Chinese willingness to engage further in collaborative efforts. Using tariffs as a political bargaining chip is a tool valued by the Trump Administration [11], and thus, this solution may be seen as politically amenable to current leadership. However, the provisions of these recent deals have only reduced exports of some minerals. Whether these deals will hold up and reliably stabilize supply chains remains to be seen.[12]
Suggestion 3: Pursue Alternatives to Rare Earth Minerals
A final solution aims to support U.S. industries by eliminating their dependence on rare earths. This solution requires increased investment in alternatives such as ferrite magnets or other iron-nitride supermagnets. Research should also investigate alternative designs for products, like motors, that do not require these magnets at all. This solution is further enhanced by the already high interest in these types of designs.[13] Furthermore, it would cut the issue out entirely by again circumventing China without requiring potentially politically weak alternative supply chains. However, this solution also requires an intense amount of time and resources. To entirely shift the massive dependence of U.S. industries on rare earths is not feasible in the near future; U.S. supply chains would remain volatile in the present.
Proposed Solution
Considering the costs and benefits of each strategy, an effective policy would follow the outlined two-pronged approach in the first proposed solution above. This solution is beneficial in that it provides both long- and short-term solutions to dependence on China. In the short term, urgently needed critical earth minerals can be brought to U.S. manufacturers. This will buy time for a more permanent solution to the issue, namely, the development of domestic processing capabilities. Through this, the United States would have immediate access to processing at domestic plants. Costs would be reduced, and dependence on fluctuating global supply would be eliminated.
- https://cepa.org/article/how-to-loosen-chinas-stranglehold-on-rare-earths/
- https://www.investing.com/news/commodities-news/factboxwhat-to-know-about-chinas-rare-earth-export-controls-4079938
- https://www.reuters.com/world/china/china-tightens-rare-earth-export-controls-2025-10-09/; https://www.nytimes.com/2025/10/27/business/china-rare-earth-export-controls.html
- https://www.investing.com/news/commodities-news/factboxwhat-to-know-about-chinas-rare-earth-export-controls-4079938; https://www.nytimes.com/2025/10/27/business/china-rare-earth-export-controls.html
- https://foreignpolicy.com/2025/10/31/trump-china-rare-earth-critical-mineral-asia-equity-stake/; https://www.nytimes.com/2025/10/30/business/china-rare-earth-export-controls.html; https://www.bbc.com/news/articles/cly9kvrdk2xo
- https://www.csis.org/analysis/chinas-new-rare-earth-and-magnet-restrictions-threaten-us-defense-supply-chains
- https://discoveryalert.com.au/south-carolina-rare-earth-magnet-production-2025/
- https://discoveryalert.com.au/south-carolina-rare-earth-magnet-production-2025/
- https://foreignpolicy.com/2025/10/31/trump-china-rare-earth-critical-mineral-asia-equity-stake/; https://www.bbc.com/news/articles/cj6ny24j0r3o
- https://www.bbc.com/news/articles/cj6ny24j0r3o
- https://www.wsj.com/politics/policy/trump-tariffs-foreign-policy-c59ca442?gaa_at=eafs&gaa_n=AWEtsqe8b7fgXzTAHHnR-qajrVJsJSmnsID7zeXwn3_7FO-6DzZcMZ2YwW8oFqFk29k%3D&gaa_ts=69351b55&gaa_sig=X9NQoOOdQY-ExV6MQvM_VBF3tXqUeewsTOO9bOdipgldTf8jPM-H3ADhTU5d7SnNO3zE_lhyyzzst5kHYnegPw%3D%3D
- https://tradingeconomics.com/united-states/balance-of-trade/news/498326; https://www.nytimes.com/2025/10/30/business/china-rare-earth-export-controls.html
- https://www.okonrecycling.com/magnet-recycling-and-applications/magnet-technology/green-alternatives-to-rare-earth-magnets/#:~:text=Iron%20Nitride:%20A%20Powerful%20Alternative&text=The%20appeal%20of%20iron%20nitride,footprint%20associated%20with%20magnet%20production