Highlights

• Trump's April 2025 Section 232 Executive Order launched a Commerce Department investigation into critical minerals imports.
• Final recommendations from the investigation are expected by October 2025.
• Potential tariffs or import restrictions could follow in early 2026.
• The U.S. imports over half of 46 non-fuel minerals and is 100% dependent on roughly 15 of them.
• China controls 90% of global rare earth refining and dominates the entire mine-to-magnet supply chain after 30 years of strategic investment.
• Despite Washington's initiatives, the U.S. lacks a unified industrial plan and cannot scale heavy rare earth production within the critical 24-month window when supply crunches are anticipated.
• China is tightening export controls and pushing U.S. defense contractors out of its feedstock pool.

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Critical minerals—including the rare earth elements essential for advanced manufacturing and defense—anchor modern economies and national security. Yet the United States remains profoundly exposed. The U.S. imports over half of 46 non-fuel mineral commodities, with roughly 15 of them effectively 100% import dependent, while China controls roughly 90% of global rare earth refining capacity and dominates graphite, cobalt, lithium, chemicals, and magnet production.

This vulnerability is not hypothetical. China has repeatedly used export controls—on gallium and germanium, rare earth magnets, and heavy rare earth metals—to pressure the U.S. semiconductor, automotive, aerospace, and defense sectors. These structural risks are precisely why the Trump administration’s April 15, 2025, Section 232 Executive Order (opens in a new tab) marked a major escalation in America’s critical minerals strategy.

Section 232 Investigation and Report

President Trump directed the Commerce Department to investigate whether imports of processed critical minerals and derivative products threaten national security. The scope was enormous: oxides, metals, powders, alloys—and all downstream goods using them, from EV batteries to permanent magnets, radar systems, and jet engines.

Commerce launched the investigation on April 22, 2025, and collected extensive public comments. Under the order, Commerce must submit a final report with recommendations to the President within 180 days of initiation—i.e., by October 2025. As of mid-November, that report has not been released publicly; it is expected to include:

• A country-by-country risk analysis
• Identification of U.S. import vulnerabilities
• Mapping of distortive Chinese pricing and export practices
• An assessment of domestic processing capacity
• Policy options to mitigate national-security exposure

The President then has up to 90 days—taking us into early 2026—to decide on trade actions.

Expected Options and Policy Response

Even before the final report, the administration previewed a broad policy toolkit:

• Tariffs or import limits on minerals or derivative products deemed a national-security threat
• Anti-circumvention safeguards to prevent rerouting through third countries
• Incentives for domestic processing, mining, and recycling
• Use of emergency economic powers and enhanced stockpiling

Parallel diplomatic moves signal urgency. In October 2025, the administration announced over billion in allied critical minerals partnerships with Australia, Japan, Malaysia, Thailand, and Cambodia. A note from Rare Earth Exchanges (REEx), this $10 billion figure does not necessarily mean guaranteed hard cash injection—it represents potential.

Domestically, the updated 2025 USGS Critical Minerals List expanded to 60 minerals, widening the scope for federal investment tools, Defense Production Act authorities, and strategic stockpiling.

Has China Already Won? A Harsh Reality Check

Despite the movement in Washington, the evidence on the ground suggests the U.S. is losing the critical minerals race—and may already be deep into the second half. Why?

First, as REEx continuously reports,  America lacks a unified industrial plan.

REEx sees fragmented initiatives, optimistic (at times politicized) narratives, and inconsistent messaging from the administration—none of which add up to a wartime-caliber industrial strategy. China, by contrast, has spent 30 years building an integrated mine-to-magnet ecosystem.

Second, and this is where the reader needs to slow down and pay extra attention, the Chinese supply is quietly closing.

Treasury Secretary Scott Bessent has publicly argued that China “made a real mistake” by firing the rare-earth shot and will not be able to use minerals as a coercive tool for long. But China’s state economic and military planners have been preparing for this very confrontation, and Chinese policy is tightening, not loosening. The emerging export-license and “validated end-user” regime is designed to fast-track shipments to approved civilian firms while denying licenses for foreign defense end-use. In practice, U.S. defense contractors are being pushed out of the Chinese feedstock pool, regardless of what headline talking points from Washington suggest.

On to the third point. America’s only integrated mine-to-magnet project, operational—MP Materials—along with the broader U.S. industrial base, faces unforgiving timelines.

Defense-grade magnets require separated dysprosium and terbium, and while MP Materials is expected to eventually produce meaningful heavy-REE output, the deeper question remains: does the United States currently possess the workforce, technical depth, and industrial muscle to scale light and heavy-rare-earth separations at speed in the short to intermediate term?

Put bluntly, it is unlikely this can be achieved within the next 24 months—precisely the window in which many analysts anticipate a potential supply crunch. The “mine-to-magnet revival” narrative—patriotic and necessary, and one REEx fully supports—often overlooks an uncomfortable truth: without a WWII-level industrial mobilization, the U.S. cannot deliver the heavy-REE inputs required at the volumes and pace demanded in the near to mid-term.

Finally, China’s economic war is well underway.

China is battling an internal overproduction (and debt) crisis—flooding markets with all sorts of products, and we expect global demand to soften with tenuous economies.  Beijing has prepared for the next phase as necessary: the prospect of strangling Western access to inputs, weaponizing export licenses, and tightening control over the entire REE value chain. Meanwhile, U.S. industry remains unsure whether to invest, hedge, or freeze—paralyzed in part by mixed political messaging (e.g. we will have all the magnets we will need by next year).

Outlook: A Race Against Time

As of mid-November 2025, the Commerce Department has not yet announced any Section 232 tariffs on processed critical minerals or derivative products. The investigation is underway, public comments are being evaluated, and the administration is signaling a willingness to impose targeted measures—but no formal tariff schedule has been released.

What is clear is the broader strategic orientation

The U.S. is accelerating efforts to secure critical mineral supply chains through allied sourcing, domestic incentives, Defense Production Act authorities, reshoring mandates, and—where necessary—selective trade restrictions. Yet without a coordinated, industrial-scale mobilization, America’s capacity still trails China’s entrenched, vertically integrated dominance.

Section 232 represents the opening salvo of a long-overdue strategic reset. But the core question facing U.S. policy is no longer whether to act; it is whether the nation can move fast enough to narrow a gap that continues to widen.

© 2025 Rare Earth Exchanges™ – Accelerating Transparency, Accuracy, and Insight Across the Rare Earth & Critical Minerals Supply Chain.