China controls nearly 70 percent of the world’s rare earth mining and 90 percent of its processing — metals that power electric vehicles, jet engines, smartphones, and even AI data centres. In October 2025, Beijing introduced sweeping licensing rules that tightened control over exports, extending even to products containing trace amounts of Chinese-origin rare earths or built with Chinese mining technology. The move jolted Washington, which warned that the curbs could choke global manufacturing and hand China a new economic weapon, the New York Times reported.
Washington’s response: invest, regulate, and partner
President Trump’s administration has launched a flurry of moves to rebuild mineral independence. It has taken stakes in mining and refining firms, discussed price floors and a strategic reserve of rare earths, and announced a joint investment pact with Australia to develop allied mineral supply lines. US Treasury Secretary Scott Bessent said the goal is to “make sure this doesn’t happen again” — meaning no single country, especially China, should be able to disrupt US industry by cutting off access to critical materials.
The US Defense Department has already invested $400 million for a 15 percent stake in MP Materials, which runs the Mountain Pass rare-earth mine on the California–Nevada border. The company is finishing a Texas factory to supply General Motors and planning another to expand magnet production. Washington has also funded Canadian and US ventures such as Trilogy Metals and Lithium Americas, hoping to secure copper, zinc, and lithium for batteries and defence technologies.
The challenge: time and coordination
Despite these aggressive steps, analysts warn that building new mines, refineries, and processing plants will take years. The technology is complex, environmental permits are hard to get, and China’s low prices still make many foreign projects uneconomical. The administration’s push is also hampered by political gridlock — a government shutdown, funding lapses, and an under-staffed bureaucracy. Coordination across US agencies like Defense, Energy, Commerce, and Treasury remains patchy, and US Congress has yet to approve new funding for the Development Finance Corporation, which is key to overseas investments.
The broader strategy
Trump officials say this is not just a US–China dispute but a global struggle over industrial resilience. The new National Energy Dominance Council at the White House is leading efforts to find alternative suppliers in Africa, Australia, Canada, and India. The administration also plans tariffs on foreign critical minerals to protect domestic producers. “This is China versus the world,” said Treasury Secretary Bessent, framing the policy as a collective defence of industrial freedom.
The long game
Experts caution that China’s licensing system isn’t likely to vanish, even if tensions ease in upcoming Trump–Xi talks. Beijing has used rare-earth leverage before — most notably in 2010 against Japan — and could do so again. Meanwhile, the United States faces a structural disadvantage: it dismantled much of its own refining capacity decades ago. Rebuilding that ecosystem will take patient investment, global coordination, and steady policy — three things Washington has often struggled to sustain.
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