Critical Minerals After Trump: Bipartisan Strategy, Partisan Execution Risk

Highlights

• China controls ~90% of rare-earth separation and permanent-magnet production, making supply-chain diversification a bipartisan national security priority regardless of which party holds power.
• Democrats have already launched document requests targeting USA Rare Earth's $277M federal arrangement and its ties to Cantor Fitzgerald, led by Commerce Secretary Howard Lutnick's sons.
• Key bridge Democrats—including Cortez Masto, Hickenlooper, Khanna, and Bera—support domestic mineral production but favor competitive financing, labor standards, and tighter conflict-of-interest rules.
• A Democratic House majority would likely produce more industrial policy, not less, but shift toward rules-based mechanisms such as tax credits, strategic reserves, and allied-country sourcing.
• Other critical-minerals companies receiving federal support may also face congressional scrutiny over financing, valuation, and political connections if control of the House changes.

---

Are political signals real, but easy to misread? As of August 2026, the electoral environment favors Democrats: Nate Silver’s generic-ballot average has Democrats ahead by roughly 6 points, while recent Democratic primaries have produced conspicuous progressive victories, including Abdul El-Sayed for Michigan’s Senate nomination and Sunrise Movement co-founder William Lawrence in a competitive Michigan House district. But the shift is not uniformly leftward (opens in a new tab); moderates have also prevailed in important Democratic contests. For America’s sake, we cannot go to extremes in either direction. The nation needs a steady industrial policy, and should there be a shakeup during the midterms, it will be imperative that the momentum the Trump administration has spurred continues, albeit, as we have suggested, with refinements.

For critical minerals, that distinction matters. A Democratic Congress is unlikely to abandon critical-mineral industrial policy. It is much more likely to change who receives federal support, the conditions attached to it, and the amount of scrutiny applied to deals. China still accounts for about 90% of magnet-rare-earth separation/refining and 90% of permanent-magnet production, making diversification a structural national-security imperative transcending Trump.

Democrats have built their own industrial-policy architecture

The emerging Democratic position is increasingly “produce, process and recycle more—but with competition, labor/environmental standards and tighter governance.” Recent legislation demonstrates considerable overlap with industry. Sens. John Hickenlooper and Chris Coons reintroduced the Critical Materials Future Act in last year (opens in a new tab), authorizing DOE financial mechanisms such as contracts for differences and advanced-market commitments for domestic processing. Coons, Hickenlooper and Rep. Kathy Castor also backed the Finding ORE Act, using USGS mapping and U.S. financing to help American firms develop allied-country deposits.

Sen. Catherine Cortez Masto (opens in a new tab)is particularly important: her bipartisan Rare Earth Magnet Security Act (opens in a new tab)provides a $20/kg domestic magnet-production credit, rising to $30/kg when components are domestically produced or recycled; she has also championed permitting certainty for Western mines and a critical-minerals alliance financed partly through tariff revenues. Those proposals have received explicit mining-industry support.

In the House, Ro Khanna (opens in a new tab), despite his progressive profile, joined Republican China Committee Chairman John Moolenaar on 2026 legislation creating tax credits for domestic magnet production. Ami Bera’s bipartisan DOMINANCE Act—supported by Newmont, the National Association of Manufacturers and the American Critical Minerals Association—passed the House in June. Rep. Chris Pappas (opens in a new tab)became the first House Democrat to support the SECURE Minerals Act’s strategic mineral reserve (opens in a new tab).

USA Rare Earth faces unusually high investigation risk

A Democratic House investigation of USA Rare Earth is not merely plausible; Democrats have already begun it. The administration’s January 2026 non-binding arrangement contemplates up to $277 million in federal funding and a $1.3 billion CHIPS Act loan, alongside a government equity position approximating 10%. At the same time, USA Rare Earth raised $1.5 billion privately with Cantor Fitzgerald—now run by Commerce Secretary Howard Lutnick’s sons—as lead placement agent (opens in a new tab).

That has already triggered demands for documents from Natural Resources ranking member Jared Huffman (opens in a new tab), Oversight ranking member Robert Garcia (opens in a new tab), Senate Energy ranking member Martin Heinrich (opens in a new tab), and Sens. Chris Van Hollen (opens in a new tab), Elizabeth Warren (opens in a new tab) and Ron Wyden (opens in a new tab). Democrats specifically requested the USAR agreement, milestones, communications and information about Lutnick’s involvement (opens in a new tab).

More tellingly, Democrats attempted in March to subpoena (opens in a new tab) Donald Trump Jr. concerning the separate Vulcan Elements minerals transaction; Republicans blocked it. The same hearing explicitly highlighted USA Rare Earth and Cantor Fitzgerald. A Democratic majority would control committee gavels and subpoena agendas.

Therefore, a USAR hearing/document investigation after a House flip should be considered highly likely, even if cancellation of the underlying project is much less certain.

USA Rare Earth may not be alone. Rare Earth Exchanges® understands that other critical-minerals companies and federally supported transactions are also on the radar for potential congressional scrutiny, particularly around government financing, company selection, valuation, conflicts of interest and political connections. REEx is not in a position to identify those companies at this time, and being scrutinized does not imply wrongdoing. But industry participants should recognize that a change in congressional control could widen the investigative lens well beyond USAR.

The Democrats industry should cultivate

The strongest bridge figures are Cortez Masto, Hickenlooper, Coons, Mark Kelly and Elissa Slotkin in the Senate and Khanna, Bera, Castor, Chrissy Houlahan and Pappas in the House. Their records combine China competition, domestic manufacturing and public-private capital rather than opposition to minerals development itself. Kelly has sponsored bipartisan critical-mineral-list reform (opens in a new tab); Slotkin backs both expanded production and a strategic reserve; Houlahan has co-led bipartisan critical-mineral supply-chain legislation.

Committee leaders are more complicated.

Jared Huffman (D-California) favors (opens in a new tab) reshoring but opposes what he calls giveaways and weakened mining regulation; Energy and Commerce Democrats under Frank Pallone explicitly support domestic critical-material supply chains while emphasizing recycling and environmental safeguards.

What is actually precarious

The strategy is durable; the Trump implementation model is precarious. Democrats are unlikely to reverse the national objective of breaking Chinese mineral dependence. What is vulnerable are direct federal equity stakes, noncompetitive company selection, relaxed technical diligence, controversial permitting shortcuts and deals involving politically connected financiers. Democrats have already characterized those mechanisms (opens in a new tab) as “picking winners and losers” and demanded their legal justification.

Thus a Democratic House would probably produce more industrial policy, not less—but more rules-based industrial policy: competitive financing, processing and recycling incentives, strategic stockpiles, allied sourcing, domestic-content requirements and tougher labor, environmental and conflict-of-interest standards. USA Rare Earth’s strategic rationale may survive; the process by which Trump chose and financed USA Rare Earth is considerably less secure.

Democrat

State / District

Verified Critical-Minerals Legislation / Initiative

Catherine Cortez Masto

Nevada — U.S. Senate

Rare Earth Magnet Security Act of 2025 (S. 1979) — establishes a production tax credit for domestically produced high-performance rare-earth magnets.

John Hickenlooper

Colorado — U.S. Senate

Critical Materials Future Act of 2025 (S. 596) — DOE pilot supporting domestic critical-material processing; Finding ORE Act (S. 1463) — allied-country critical-mineral/REE mapping cooperation.

Chris Coons

Delaware — U.S. Senate

Critical Materials Future Act of 2025 (S. 596) — original cosponsor; Finding ORE Act (S. 1463) — Senate sponsor.

Mark Kelly

Arizona — U.S. Senate

Critical Mineral Consistency Act of 2025 — bipartisan legislation with Sen. Mike Lee designed to reconcile DOE's Critical Materials List with Interior/USGS's Critical Minerals List.

Elissa Slotkin

Michigan — U.S. Senate

PRIMED Act — bipartisan permitting reform intended to accelerate qualifying domestic mining, mineral-processing and related manufacturing projects; SECURE Minerals Act of 2026 — supports creation of a Strategic Resilience Reserve; also sponsored S. 3164 concerning increased DoD procurement of U.S.-sourced strategic and critical materials.

Kathy Castor

Florida — 14th Congressional District

Finding ORE Act (H.R. 2969) — bipartisan House legislation authorizing international cooperation through USGS on mapping critical minerals and rare-earth resources.

Ro Khanna

California — 17th Congressional District

Magnets Value Chain Support Act of 2026 (H.R. 9227) — introduced with Rep. John Moolenaar; creates tax incentives supporting domestic permanent-magnet production and use across the magnet value chain.

Ami Bera

California — 6th Congressional District

DOMINANCE Act (H.R. 7037) — bipartisan legislation to expand U.S./allied critical-mineral investment, financing, diplomacy and supply-chain diversification; passed the House June 8, 2026.

Chris Pappas

New Hampshire — 1st Congressional District

SECURE Minerals Act of 2026 (H.R. 7126) — first House Democrat to cosponsor; establishes a Strategic Resilience Reserve for critical minerals and materials.

Chrissy Houlahan

Pennsylvania — 6th Congressional District

Finding ORE Act (H.R. 2969) — original cosponsor; also previously co-led the bipartisan Critical Minerals Security Act, focused on gathering information on global critical-mineral resources, ownership and supply chains.