Highlights
- Ford Motor Company has experienced plant shutdowns due to critical rare earth permanent magnet shortages from China.
- China is strategically restricting rare earth exports as a potential economic leverage point during ongoing trade tensions with the U.S.
- U.S. manufacturing faces potential widespread disruption without developing independent rare earth processing and supply capabilities.
In a stark warning to U.S. industry and consumers, Rare Earth Exchanges (REEx) again confirms that the global rare earth supply crisis is moving beyond policy and into practice, with American manufacturing now visibly at risk. As this media reported, Ford Motor Company CEO Jim Farley publicly acknowledged this month that his company has already shut down plants, including a one-week closure of its Chicago Explorer SUV facility, due to a critical shortage of rare earth permanent magnets. As REEx reported recently, he noted, “It’s hand-to-mouth right now.” Farley admitted that rare earth magnet flows from China slowed to a trickle under new export license controls.
This is not a forecast—it’s happening. The implications are far more severe than a week-long shutdown at a single plant. Motors, seats, infotainment systems, wipers—rare earth magnets are everywhere in modern vehicles. If the supply chain continues to choke, experts warn, the entire domestic auto sector could face rolling shutdowns.
Yes, the U.S. trade delegation met with Chinese counterparts in London for what appeared to be a productive round of negotiations. A framework—building on prior talks in Switzerland—was reportedly established to guide a path toward full normalization between China and the United States. President Donald Trump wasted no time touting the progress on social media, essentially declaring that a deal had been reached.
But as REEx has previously reported, what we have is a pathway to a deal, not the deal itself. While the agreement ostensibly includes faster approvals for rare earth magnet exports, the reality is far murkier. The Chinese export bureaucracy is opaque, and it remains unclear how quickly—or selectively—these controls will be lifted. The proof will come not in press releases, but in whether shipments resume. We’ll know soon enough.
And in the United States, we must understand that Beijing’s calculated export delays are no accident. China has little incentive to ease rare earth shipments while locked in a tariff-fueled trade war with the U.S. Even during a calm period meant to help both countries get to the trade negotiation finish line.
As Farley and others have told Washington, the Chinese know these minerals are our pain point. By targeting this one input, they can hit industrial jobs in Michigan, Indiana, Ohio, and beyond, forcing a domestic recession without firing a shot. And Farley’s candor is unusual—and necessary. Yet, despite recent claims from President Trump that Beijing has agreed to speed approvals, there is no evidence of meaningful relief. Approvals are being granted “one at a time,” while entire value chains are being destabilized.
Do economic signals from the ports of Los Angeles and Long Beach confirm the looming contraction? It would appear so. Import volumes are down nearly 20% month-over-month. Thousands of workers are losing hours. Empty store shelves and inflationary pressure on key components are on the horizon. According to a piece in the New York Post (opens in a new tab) just days ago, “Shipping activity at major West Coast ports has plummeted, with the Port of Los Angeles averaging just five ships a day—down from a typical dozen—and job orders for dockworkers falling by nearly 50%, according to port officials.”
REEx urges policymakers to prepare for more U.S. factory stoppages, not fewer. The time for reactive half-measures is over. We find ourselves beating a dead horse again—the need for critical mineral (including rare earth element) industrial policy. The West, led by America, must scale rare earth processing, secure new supply lines, and develop permanent magnet manufacturing before America’s manufacturing core collapses under China’s thumb.
The writing is on the wall: without independent rare earth capacity, the next shutdown may not be a week, but rather, the beginning of a national industrial spiral. REEx implores the media to take this far more seriously.
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