Reconciliation Bill Throws Money at Defense-But Leaves U.S. Critically Exposed on Rare Earths

Highlights

• The proposed $150 billion defense funding bill lacks a comprehensive strategy for securing critical minerals and rare earth element supply chains.
• Current legislation ignores the strategic threat of foreign mineral dependency, particularly China's monopoly on essential defense manufacturing inputs.
• Without a holistic approach to critical minerals policy, U.S. defense manufacturing remains at risk of supply chain disruption.

The proposed Reconciliation Act of 2025 allocates $150 billion in additional defense funding, including munitions stockpiling and shipbuilding, but dangerously sidesteps the core strategic threat: America's overwhelming dependence on foreign critical minerals and rare earth elements.

While the bill funds rocket motor supply chains and supports implementation of the President’s critical minerals executive order, it stops well short of launching a full-spectrum industrial mobilization. There is no direct funding for rare earth mining, refining, or alloying at the scale needed to break China’s chokehold. No national stockpile, no emergency refining hubs, no coordinated defense-industrial mineral policy.

The only mention of critical minerals to note as cited in Breaking Defense (opens in a new tab):

“These funds will focus on building up the stockpiles of munitions most needed in a fight against China, and also include investments in the solid rocket motor supply chain and measures needed to implement the White House executive order on critical minerals.”

Defense manufacturing is impossible without secure access to critical inputs, such as neodymium, dysprosium, and tungsten. By ignoring the upstream supply chain, this bill merely papers over the cracks in America’s warfighting foundation. Policymakers cannot afford to confuse short-term defense appropriations with real long-term security. Without decisive action on critical minerals, every missile, ship, and aircraft funded by this bill remains hostage to foreign suppliers.

Neither President Trump nor his predecessor, Biden, grasped the severity of the situation. Otherwise, a more material commitment toward resilience would be included in the proposed bill. A holistic view—encompassing upstream, midstream, and downstream perspectives—must be adopted and represented in critical mineral and rare earth industrial policy.   Rare Earth Exchanges has noted that free market solutions, at least in the short to intermediate term, will likely ensure the U.S. can transcend the grip of the current Chinese monopoly.

Sources:

• Reconciliation Act of 2025 (proposed draft)
• Breaking Defense, April 2025
• White House Fact Sheet on Critical Minerals Executive Order, March 2025
• CSIS Critical Minerals Supply Chain Analysis, 2025