Trump Issues Executive Order On Rare Earths – America Investigates While China Dominates

Highlights

• President Trump issued an executive order investigating the national security risks of the U.S.’ dependence on foreign-processed critical minerals.
• The order triggers a 180-day Department of Commerce investigation, potentially enabling tariffs, domestic production incentives, and supply chain restructuring.
• The Executive Order diagnoses U.S. mineral supply chain vulnerabilities, but risks giving China time to strengthen its global mineral processing dominance.

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In response to China’s abrupt suspension of rare earth and derivative product exports to the United States, President Donald J. Trump has issued a sweeping Executive Order under Section 232 of the Trade Expansion Act of 1962. The order mandates an immediate investigation into the national security risks posed by U.S. dependence on foreign-processed critical minerals and products manufactured with them, ranging from permanent magnets and batteries to radar systems and EV components. The Department of Commerce must deliver its recommendations within 180 days, with tariff measures, domestic production incentives, and even actions under the International Emergency Economic Powers Act (IEEPA) on the table.

While the Executive Order (EO) outlines the structural vulnerabilities of U.S. supply chains and correctly diagnoses the geopolitical leverage wielded by dominant processors like China, it stops short of offering a full-spectrum industrial policy. The directive focuses heavily on upstream risks, such as import reliance and market distortions, but lacks actionable measures to build midstream capacity, such as magnet manufacturing, or downstream integration, including advanced electronics and defense components. As Rare Earth Exchanges has long argued, securing ore is only one part of the equation. Without robust processing, component manufacturing, and end-product capabilities, the U.S. remains exposed to external chokeholds.

Moreover, while politically potent, Trump’s insistence on unilateral trade mechanisms may undercut the strategic alliances necessary for lasting resilience. Nations like Australia and Canada, already key suppliers and democratic allies, require more than ad hoc bilateral deals. They must be embedded in a cohesive Five Eyes-backed framework that pools capabilities across mining, refining, and advanced manufacturing. The current EO reflects a defensive posture rooted in nationalistic trade doctrine, not the proactive coalition-building required for long-term supply chain sovereignty.

To its credit, the order signals that the U.S. executive branch now fully recognizes the national security dimensions of the critical minerals crisis. It opens the door to tariffs, anti-circumvention measures, and domestic production incentives. But unless it is paired with aggressive industrial policy investments, clear strategic partnerships, and a commitment to rebuilding the full value chain on American soil and with trusted allies, the United States risks replacing one form of dependency with another.

More Time for China?

Does this EO give China more time to accelerate its advancements? It’s certainly possible. And that’s the uncomfortable irony. While the EO acknowledges the urgent threat posed by U.S. reliance on China for processed critical minerals and derivative products, the actual mechanism it triggers—a Section 232 investigation—could inadvertently give Beijing more time to strengthen its position.

Here’s how:

First, the delayed action and strategic paralysis can worsen the situation.

The Section 232 process is bureaucratically timed: 180 days for a report, then potential White House action. That’s six months during which China can accomplish the following:

• Further consolidate its grip on global refining capacity.
• Strengthen exclusive mineral processing deals with the Global South (e.g., Africa, Latin America).
• Dump product into allied markets like Europe or ASEAN to fracture Western alignment.

Second, unlike the rapid, retaliatory measures often used by China (as we just saw with the export halt), the EO launches a study, not a counterpunch. Beijing may read this as a tactical pause, not a policy offensive. There’s no immediate signal of tariffs, quotas, or outright bans on Chinese rare earth-derived imports.

Third, is Trump missing an opportunity to secure an allied front? While the EO emphasizes national security, it’s still rooted in a unilateral, mercantilist framework. It does not:

• Create binding industrial alliances with Australia, Canada, or Japan.
• Incentivize joint ventures or co-financed downstream infrastructure.
• Codify critical supply corridor protections with Five Eyes or NATO nations.

This leaves the U.S. siloed at a time when China is coordinating vertically integrated rare earth strategies with BRICS partners and Belt and Road-aligned states.

The bottom line here is that the EO is a warning shot, not a counterstrike. It diagnoses the disease but prescribes delay. Is it actually meant as a signal to China to work together?   China, meanwhile, continues refining, stockpiling, and locking in global contracts. Unless this EO is immediately followed by hard industrial policy, defense procurement mandates, and allied coordination, it may do more to benefit China than to restrain it.

Rare Earth Exchanges will continue to monitor the Section 232 process closely. Stakeholders across the mining, processing, defense, and clean energy sectors should engage now, before the report becomes yet another missed opportunity to reset America’s critical minerals future on a competitive and sustainable footing.