Highlights

• Treasury Secretary Scott Bessent uses China's restrictions on dysprosium, terbium, and critical minerals to justify Trump's emergency tariffs under IEEPA, with the Supreme Court set to review the administration's legal authority.
• Following a Trump-Xi meeting in South Korea, the U.S. suspended plans for 100% tariffs while China agreed to ease select export curbs, though the U.S. still imports 90% of separated rare earths from China.
• The real emergency is America's underbuilt midstream capacity—not tariff theater—as policy volatility creates investor uncertainty when capital stability is needed to rebuild domestic refining and magnet production.

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In a striking intersection of policy and minerals, U.S. Treasury Secretary Scott Bessent has linked China’s recent rare earth export restrictions to justify President Donald Trump’s emergency-based tariff regime under the International Emergency Economic Powers Act (IEEPA). Rare Earth Exchanges (REEx) went on the record, suggesting POTUS focus on the rare earth element supply chain emergency as the basis for IEEPA powers. It’s an argument that just may work. After all, the crisis is real.

In an interview on Fox News Sunday, Bessent argued that Beijing’s moves—curbing shipments of dysprosium, terbium, and other critical elements—qualified as an “emergency” threatening America’s industrial base. His timing was tactical: the U.S. Supreme Court is set to hear arguments this week on whether the administration’s invocation of IEEPA for reciprocal tariffs is lawful.

Bessent contends the White House acted responsibly, calling the tariffs a direct response to Chinese coercion. Following an October cease-fire meeting between Trump and President Xi Jinping in South Korea, the U.S. suspended plans for an additional 100 percent tariff, while Beijing agreed to ease select rare-earth export curbs.

Separating Fact from Theater

The rare earth restrictions Bessent cites are real and significant. China’s MOFCOM Notices No. 18 and 61 (2025) did expand licensing to twelve REEs, including Dy, Tb, and Yb—core inputs for EV motors, wind turbines, and defense applications. Supply interruptions this year indeed rattled automakers in the U.S., Europe, and Japan.

But linking those restrictions directly to America’s fentanyl trade or trade-deficit “emergencies,” as Bessent implied, is more political alchemy than economic causation. The administration’s narrative of “rare earth retaliation” simplifies a far more complex interplay of geopolitics, industrial policy, and domestic optics. While tariffs may raise negotiating leverage, they do not build refineries, separation plants, or magnet facilities—the actual choke points of U.S. dependency.

The Real Emergency: Industrial Execution

From a REEx standpoint, the real emergency is America’s underbuilt midstream. The U.S. imports nearly 90 percent of its separated rare earths and over 70 percent of its magnet metals from China. Firms like Ucore, Energy Fuels, and Aclara Resources (ranked 10th in the REEx Heavy Rare Earth Element Database) are attempting to rebuild that capacity domestically. Not to mention the work of MP Materials.  

Yet policy volatility—swinging between tariffs and truce—creates investor uncertainty precisely when capital discipline and permitting stability are needed most.

A Drama of Power and Symbolism

Bessent’s defense of tariffs doubles as a campaign of symbolism: portraying the White House as the protector of national resources. Whether the Supreme Court validates that symbolism as law remains to be seen. What’s clear is that rare earths have again become a proxy battlefield for global industrial power—and America’s ability to refine, not just react, will determine who wins.

Source: Jason Ma, Fortune, Nov 2 2025; MOFCOM Notices No. 18 & 61 (2025); REEx HREE Database.

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