Highlights

• A 2013 Congressional Research Service report warned of U.S. near-total dependence on China for rare earth materials critical to national defense systems.
• Successive U.S. administrations have failed to develop a comprehensive rare earth minerals strategy, leaving defense infrastructure vulnerable.
• China has consolidated its rare earth element monopoly, particularly in midstream and downstream processing, while the U.S. continues to lack a systemic response.

Today’s strategic crisis over rare earth elements (REEs) and critical minerals is not a surprise. It was laid out in black and white in a 2013 Congressional Research Service report (opens in a new tab) titled "Rare Earth Elements in National Defense: Background, Oversight Issues, and Options for Congress" authored by Valerie Bailey Grasso (opens in a new tab). The report, dated December 23, 2013, warned of near-total U.S. dependence on China for rare earth materials essential to advanced weapons systems, including permanent magnets, missile guidance, lasers, electric motors, and communication infrastructure.

The report called attention to the erosion of U.S. mining, refining, alloying, and manufacturing capabilities since the 1980s, and raised alarm over Molycorp’s shift toward processing assets in China.

Grasso’s report outlined congressional options—from stockpiling to restarting domestic refining to vertical integration with allied partners—and even warned that restoring the defense REE supply chain could take 15 years or more. Yet here we are in 2025: the U.S. still lacks permanent magnet production of strategic scale; there is no federal industrial policy equivalent to China's state-backed "Two Rare Earth Base" consolidation campaign; and there is no serious rare earth research pipeline in our universities. Successive White Houses have failed to act meaningfully, from Obama to Trump (in his first term), to Biden, and now again under Trump’s second administration. The Defense Department continues to rely on short-term substitutions, low-volume contracts, and case-by-case workarounds rather than a systemic response.

The West continues to double down on upstream resource access—Ukraine, Canada,and even talk of Greenland acquisition—but fails to address the critical choke point: China’s monopoly on midstream and downstream refining, metallization, alloy production, and rare earth magnet manufacturing. This is where the real economic leverage resides. Without it, even the largest rare earth mines are strategic mirages.

The 2013 CRS report, issued over a decade ago, was clear: absent U.S. government leadership to fund downstream capacity, stockpiling, research, and allied integration, the defense industrial base would remain vulnerable!

That prediction has aged with painful accuracy. China has only consolidated further, while the U.S. has dithered, launched a trade war under Donald Trump’s second reign, and now China’s put severe constraints on exports of key rare earth elements.

Rare Earth Exchanges calls on Congress and the White House to immediately revisit the 2013 CRS roadmap and other comparable reports from over a decade ago, treating rare earth independence with the urgency of a true national defense imperative. Delays are no longer an oversight—they are a liability.