Highlights

• Treasury Secretary Scott Bessent suggests U.S. has export leverage through aircraft engines and chemicals.
• Rare earth dependencies remain heavily skewed toward China.
• China controls critical rare earth minerals essential to defense, technology, and manufacturing supply chains, creating a significant strategic imbalance.
• Investors and policymakers must recognize the urgent need for U.S. domestic rare earth processing and magnet-making capacity to reduce geopolitical risk.

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Treasury Secretary Scott Bessent’s (opens in a new tab) comments on Fox Business underline a real imbalance: China dominates rare earths, while the U.S. retains commanding positions in aerospace and certain specialty chemicals. Aircraft engines and parts are indeed a critical U.S. export, particularly to China’s growing civil aviation sector. Similarly, American control of advanced chemical inputs, plastics, and silicon feedstocks is factual—these are areas where Chinese manufacturers remain dependent on Western technology and supply.

Where the Clouds Start to Form

Yet, Bessent’s framing of these as “levers” against China glosses over the structural difference. Rare earths are deeply embedded upstream in virtually every U.S. defense and technology supply chain, while aircraft engines or IPO markets are optional choke points. So, if China tightens rare earth exports, U.S. automakers, defense contractors, and energy firms will stall within weeks. If Washington limits engine parts, Chinese airlines grumble—but Beijing has already been investing in COMAC and domestic aero-engine capacity for precisely this scenario. However, it’s debatable how ready the Chinese are.

The Bias Beneath the Banter

The bias here in Reuters' recent media entry leans toward American optimism, presenting U.S. leverage as equal when, in practice, the dependency is asymmetric. The assertion that “rare earth minerals from China were flowing” is technically true today, but it ignores the very licensing bottlenecks choking European industry. The omission of this pressure point risks downplaying the urgency for domestic rare earth processing and magnet capacity. And that’s the very mission of Rare Earth Exchanges (REEx)—to make sure this mission-critical national security issue is not downplayed anymore.

Why Investors Should Care

This exchange is less about geopolitics in the abstract and more about the signal it sends: Washington knows rare earths are a vulnerability, but it is still trying to reassure markets by pointing to other bargaining chips. For the rare earth supply chain, the subtext is clear—expect continued policy moves to accelerate U.S. magnet and refining capacity as REEx continuously advocates.   Bessent’s comments underscore that the U.S. has no immediate substitute for Chinese rare earths, which is precisely why companies like MP Materials (opens in a new tab), Lynas (opens in a new tab), and Noveon (opens in a new tab) remain strategically vital, not to mention troves such as Arafura Rare Earths (opens in a new tab) in Australia.

The Rare Earth Exchanges Take

The facts are there—aircraft engines and chemicals are important exports—but Bessent overstates the leverage. Investors and policymakers should see through the rhetoric: until the U.S. builds serious rare earth refining and magnet-making capacity, China’s hand remains stronger. The rhetoric may possibly serve to calm markets, but the reality keeps America’s supply chain exposed.

Source: Reuters (opens in a new tab), September 24, 2025

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