Trump's Rare Earth Upstream Access Strategy Fails to Account for the Midstream and Downstream Reality

Highlights

• Trump's claim of breaking China's rare earth dependency is undermined by China's 85-90% global processing capacity.
• Rare earth refinement is highly technical, capital-intensive, and environmentally sensitive, making it challenging for Western economies.
• The U.S. needs a strategic industrial policy focused on domestic processing capabilities, not just mining raw materials.

In a sharp, clear-eyed analysis, TRT World’s (opens in a new tab) Murat Sofuoglu dismantles former President Donald Trump’s repeated claim that the U.S. can break its dependence on China for rare earths simply by securing mineral-rich regions like Greenland or Ukraine. Citing expert insight and supply chain data, Sofuoglu points out the inconvenient truth: even if the U.S. gains access to more raw rare earths, it still sends about two-thirds of those materials to China for processing—a critical chokepoint where China holds 85–90% of global capacity. The real bottleneck isn’t mining—it’s refining, separation, and magnet manufacturing, an intricate industrial chain that China dominates due to cheap labor, lower environmental regulations, and decades of technical expertise.

Dr. Jon Hykawy, (opens in a new tab) president of Stormcrow Capital, explains that rare earth refinement is highly technical, capital-intensive, and environmentally sensitive—factors that make it unappealing for most Western economies. He argues that the U.S. should stop focusing on chasing ore deposits and instead develop a strategic industrial policy to build out domestic processing capabilities.

That means offering guaranteed government purchase orders to magnet and chemical manufacturers willing to establish U.S.-based operations. Without such commitments, America’s ambition to reclaim its rare earth independence is more fantasy than strategy. It seems that Mr. Sofuoglu has been reading Rare Earth Exchanges.

As Sofuoglu’s piece makes clear, Trump’s rhetoric overlooks the deeper industrial realities of the rare earth supply chain—where the U.S. remains dangerously outmatched.