China's rare earths power move sparks urgency for US mineral security

According to a latest article, Bloomberg features that China’s recent use of rare earths as a strategic weapon in its ongoing trade war with the US is drawing significant attention to the need for securing domestic supplies of critical minerals. 

"Regardless of how trade negotiations evolve from here, the system as it existed is broken, and the rare-earth Humpty Dumpty, so to speak, is not getting put back together," said Jim Litinsky, CEO of MP Materials, the sole US miner of rare earths used in smartphones and defence technologies.

China, which dominates the global supply of rare earths, imposed export restrictions on seven types of the minerals last month. The move is widely viewed as retaliation against President Donald Trump’s trade policies. Companies, including Ford Motor Co., have warned of potential shortages, while US negotiators had planned to address rare earths during their meeting with Chinese officials in Geneva.

After two days of talks, the negotiating teams announced “substantial progress” in resolving trade issues, but markets are awaiting further details that will be disclosed later.

Litinsky, speaking ahead of the Swiss talks, argued that China’s actions mark a significant shift by exposing vulnerabilities in key industries. MP Materials, which began mining rare earths in California in 2017, started refining them in 2023 and aims to sell rare-earth magnets to General Motors Co. by the end of 2025.

“This idea that there was a threat that has now been utilized has really changed psychology, I think, from everybody across the board,” Litinsky said. “My impression from conversations with the Department of Defense is that there is a full-on recognition that we can’t be reliant on Chinese magnetics for national security purposes.”

China’s earlier use of rare earths as a trade tool against Japan over a decade ago prompted Japanese industry to reduce its reliance on Chinese supplies. While the US and other Western nations had already been working to mitigate China’s grip on critical minerals, the recent restrictions have accelerated these efforts.

“For years, we have warned that the global rare-earths supply chain was built on a single point of failure,” Litinsky said. “With China’s sweeping tariffs and export restrictions, that geopolitical fault line has now become a commercial reality.”

By Naila Huseynova