From The Conversation · Charles Edward Gehrke · · 3m
Why China now controls the world's rare earth supply
The U.S. abandoned rare earth processing to China decades ago. Now Beijing weaponizes that dependence against American military and industry.
In brief
The U.S. abandoned rare earth processing to China decades ago. Now Beijing weaponizes that dependence against American military and industry. China controls 91% of rare earth processing globally, giving it geopolitical leverage over the U.S. military and economy. Rebuilding American capacity will take years and…
Rare earths power everything
Magnets in your phone, cerium powder on screens, erbium in ocean cables, and rare earth compounds in car exhaust. Seventeen metals called rare earth elements are hidden in nearly every device.
Processing is the real power
Rare earths aren't actually rare, but separating them from ore is intensely difficult. Whoever controls processing controls geopolitical leverage over nations that depend on those materials.
China dominates global processing
China processes about 91% of the world's rare earth minerals and mined 60% of rare earths used in magnets in 2024. The U.S. military's F-35 fighter jets and Virginia-class submarines depend on Chinese exports.
How the U.S. lost its edge
California's Mountain Pass mine led world production until the late 1980s, but radioactive wastewater spills made it hard to operate. When China undercut prices, the U.S. switched suppliers and closed its processing plant in 1998.
The cost of cheap processing
U.S. companies got cheaper materials and avoided cleanup bills by using Chinese processors. But they handed Beijing leverage in exchange, a trade that seemed safe when China was still rising.
China weaponizes rare earths
In October 2025, China announced export controls affecting even foreign factories. A German or Japanese factory needs a Chinese license to export products if Chinese rare earths make up 0.1% or more of its value.
Real-world impact on industry
Ford had to idle its Chicago assembly plant for a week in May 2025 because it couldn't get magnets due to export rules. CEO Jim Farley said his supply was day to day with no alternate source.
“day to day”
Rebuilding takes years and billions
The U.S. government committed over 7 billion dollars since April 2025 to rebuild domestic capacity. The Pentagon bought 400 million dollars of stock in MP Materials, and the Commerce Department allocated 277 million in direct funding to USA Rare Earth.
China targets U.S. rare earth companies
On June 22, 2026, China put 10 U.S. companies on its export control list, including MP Materials and USA Rare Earth. The move blocks them from buying goods with dual civilian and military uses.
A temporary truce with strings
After Trump and Xi met in October 2025, China suspended export controls until November 10, 2026. But heavy rare earth licenses and the ban on targeted U.S. firms remain in place, meaning the truce is partial.
Three paths forward for the U.S.
Stay dependent on China (fastest, cheapest, risky). Build domestic capacity (removes dependence but takes years and billions). Partner with allies like Australia and Japan (lower risk but affected by Chinese tech bans).
The larger conflict continues
Whether the November 10 truce extends depends on Trump and Xi's September 2026 meeting. But the underlying battle over rare earth leverage will persist regardless of any temporary pause.
The takeaway
China controls 91% of rare earth processing globally, giving it geopolitical leverage over the U.S. military and economy. Rebuilding American capacity will take years and billions of dollars.
