Highlights
- China now controls rare earth magnet access through strict licensing, requiring detailed applications from U.S. companies.
- MP Materials is rebuilding the domestic rare earth supply chain, but scaling remains challenging and dependent on strategic partnerships.
- The Trump administration’s trade framework has institutionalized U.S. dependency on China rather than creating true supply chain independence.
In a candid and revealing CNBC interview (opens in a new tab), MP Materials CEO James Litinsky (opens in a new tab) confirmed what many in the rare earths industry have long feared: the U.S. rare earth supply chain remains critically dependent on China—and the Trump administration’s recent trade “deal” has entrenched that dependency, not solved it!
Litinsky, who has been ringing alarm bells for years, was blunt. “What was once theoretical is now actual,” he said, referencing China’s new licensing regime that gives Beijing granular control over which American companies can receive rare earth magnets. Far from offering long-term security, the so-called “London Framework” struck by President Trump has turned U.S. access to critical materials into a conditional privilege—one administered by the Chinese Communist Party.
Rare Earth Exchanges (REEx) has reported on this exact problem. The London discussion led to a framework for continued discussions, with the aforementioned restrictions and constraints in place for the rare earth element industry.
China Now Controls More Than Just Supply—It Controls Access
According to Litinsky, who oversees what REEx refers to as an American treasure trove, under this new licensing regime, U.S. firms—including automakers, aerospace companies, and defense contractors—must now submit detailed applications to the Chinese government to obtain rare earth magnets. These applications include specifications, product images, and potentially even contracts. In effect, this hands China both economic leverage and valuable industrial intelligence.
“This is, without a question, a long-term industrial crisis,” Litinsky warned. And it is here that REEx reminds all readers of our continued call to the Trump administration for actual industrial policy involving critical minerals, as well as rare earth elements.
Yes, the MP Materials CEO is clear: the Trump administration has mistaken temporary access for structural independence. While the White House touts headline agreements and upfront Chinese commitments, Beijing is tightening—not loosening—its grip.
MP Has Rebuilt the Supply Chain—But At a Small Scale
On the bright side, Litinsky confirmed that MP Materials is no longer just a miner. “We mine, refine, and make magnets in the United States of America,” he said. But it’s happening on a limited scale. The company has invested over $1 billion since its initial public offering and is now well-positioned to serve growing portions of U.S. demand—if it can scale its operations quickly.
That scaling, he emphasizes, depends not just on capital but also on alignment with government and private sector partners. Interest, he says, is “feverish”—but execution will still take time.
National Champion or Lone Actor?
Litinsky described MP as a “natural national champion,” capable of refining rare earths and recycling magnet materials domestically—something only MP and China can do at scale. He underscored that effective recycling, which could expand market capacity, depends on domestic refining infrastructure. Without it, the West will remain locked into China’s ecosystem even for “green” solutions.
Despite the urgency, Litinsky also made clear that MP Materials must prioritize shareholder value. The path forward will involve careful, “thoughtful” decisions about how and when to expand refining and magnet production.
Subtle Rebuke of Trump Strategy
While Litinsky doesn’t criticize President Trump by name, his remarks are unmistakably critical. The licensing arrangement created by the London framework has, in Litinsky’s words, institutionalized a dependency on China—at a time when the U.S. should be breaking free. And though Trump frequently hails MP Materials in speeches, Litinsky made clear that the company’s success is driven not by politics, but by long-term private investment and operational execution.
American Magnet Sovereignty Remains a Work in Progress
Litinsky’s interview offers a sobering reminder: flashy trade deals and tariffs are not enough to rebuild a sovereign supply chain. While MP Materials is now mining, refining, and magnetizing domestically, the company is still ramping up. And the industry as a whole remains vulnerable to China’s technological and regulatory dominance.
“What was once theoretical is now actual,” Litinsky said. The real question for Washington—and Wall Street—is whether they’ll treat this crisis as actual, too.
Rare Earth Exchanges will continue to monitor MP Materials, U.S. industrial policy, and China’s expanding control over the rare earth magnet ecosystem. Visit the Forum (opens in a new tab) to discuss these issues.
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