Highlights

• Trump has taken unprecedented steps to secure rare earth elements and critical minerals, challenging China's near-total global processing monopoly.
• The U.S. needs a comprehensive industrial policy to develop a full rare earth element supply chain and compete with China's strategic advantages.
• Forming global alliances with democratic partners is crucial for developing a robust critical minerals infrastructure and countering Chinese influence.

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President Donald Trump has undeniably done more for the Rare Earth Element (REE) and critical minerals sector than any U.S. president in recent memory. Through a cascade of executive orders, Section 232 trade actions, and aggressive mobilization of the Departments of Energy, Commerce, and Defense, Washington has taken unprecedented steps to secure these strategic materials. The Department of Defense’s 15% equity stake in MP Materials—a move unthinkable just a few years ago—was a landmark decision, signaling that rare earths are now viewed as core to national security.

The sector has responded. Projects once chasing European offtakes are pivoting hard toward the U.S., where investors and operators increasingly expect the action to be. On the surface, Trump has moved the ball further downfield than any modern president. But let’s be clear: these measures remain a fraction of what’s required.

China’s Iron Grip

China controls roughly 90% of global rare earth processing, 90%+ of permanent magnet production, and effectively, at least for now, 100% of the heavy rare earth magnet market. This dominance rests on vertically integrated, state-backed conglomerates that operate as monopolies, wielding price, technology, and export leverage at will. Against that, the U.S. remains a single-mine, single-processor story with no full industrial chain. Even with a $110/kg NdPr “floor price” announced by Trump’s administration, the support applies only to MP Materials. What happens to the next Lynas, Energy Fuels, or Pensana trying to scale in North America? Without a systemic approach, we’re rearranging deckchairs while Beijing builds aircraft carriers.

Yes, some of the investments with MP Materials will lead to mine-to-magnet production in a few years (at any noticeable scale), but by that point, the Chinese mandate to further advance downstream innovation, intellectual property, and control will have been accomplished.

The Missing Industrial Policy

What’s absent is that recognition as to how far behind we are—and the need for a whole-of-nation industrial policy that treats REEs as the backbone of 21st-century defense and energy security. Trump’s “One Big Beautiful Bill” slashed green energy targets, but REEs are not just about wind turbines and EVs; they are the sinews of stealth fighters, missile guidance systems, and data infrastructure. Without robust downstream demand signals, structured offtake guarantees, and direct workforce development programs, not to mention across-the-board price protections, the supply chain will remain a thin reed.

Global Alliances, Not Isolation

America cannot outmuscle China alone. India, Russia, and China are experimenting with coordinated blocs, as recent news shows, while Washington punishes New Delhi for Russian oil imports. This is strategic malpractice. If the U.S. is serious about countering China, it must forge durable alliances with democratic partners—Australia, Canada, Japan, South Korea, and yes, India—around shared critical mineral infrastructure.  China has far more stake in Africa than the U.S., a magnitude greater position.  This needs to change with aggressive, value-added partnerships on that continent.  Anything less cedes the field.

Investor Uncertainty and Military Brass Fear

Investors still see too much risk: volatile pricing (acknowledging the $110NdPr DoD/MP price floor), fragile offtake agreements, and regulatory backsliding. Defense contractor leadership quietly worries they will be blamed if critical magnet shortages cripple next-generation fighter and naval platforms. Meanwhile, media coverage remains shallow, missing the urgency of the crisis.

The Call to Action

Trump has set the stage, but he must now deliver the breakthrough. That means systematic binding commitments on offtakes, far more aggressive funding of separation and magnet plants, support of federal and state workforce retraining programs, and hard, open to democracies and friendly nation diplomacy to lock in a Western alliance on critical minerals.

Half measures won’t work. China is decades ahead. According to President Trump in a Fox interview recently, the USA will be making lots of magnets within a year.  Don’t be too sure about that.  To catch up—and more importantly, to leap ahead in innovation—Trump must harness this moment to launch a full-spectrum industrial policy. Anything less risks America fighting tomorrow’s wars without the materials to win them.

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