Highlights

• U.S. Under Secretary Jacob Helberg announced a strategic push for allied nations to coordinate on rare earth pricing mechanisms to stabilize non-Chinese extraction and refining against China's market dominance and price volatility.
• While price coordination addresses boom-bust cycles that have repeatedly killed Western projects, experts argue it's insufficient without a comprehensive industrial policy spanning subsidies, workforce development, downstream R&D, and allied orchestration.
• Helberg's background in U.S.-China economic competition, technology policy, and national security positions him uniquely to drive this shift from treating rare earths as ordinary commodities to strategic assets requiring coordinated intervention.

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In a revealing interview with Bloomberg, U.S. Under Secretary of State for Economic Affairs Jacob Helberg (opens in a new tab) outlined a new strategic push by Washington to coordinate with allies on a rare earth pricing mechanism—an effort aimed at stabilizing non-Chinese rare earth extraction and refining in the face of China’s entrenched dominance. Speaking ahead of a high-level meeting of foreign ministers in Washington, Helberg described growing “momentum and excitement” around coordinated pricing as a way to shield producers from extreme volatility that has repeatedly undermined Western investment and reinforced China’s near-monopoly over rare earth element (REE) processing.

What This Is—and What It Is Not

This development is not an academic study but a policy signal grounded in decades of market evidence. It reflects accumulated lessons from failed Western projects, repeated price collapses, and China’s strategic use of market power. The proposal—still undefined—centers on coordinating price floors, reference prices, or stabilization tools among allied nations to make rare earth mining and, critically, refining economically viable outside China.

The underlying hypothesis is simple: China’s dominance has been sustained as much by price volatility as by technical capacity. When prices crash, Western projects fail. When they recover, China’s integrated system captures value. Price coordination seeks to break that cycle. While U.S. and Western firms’ fate lies in the balance.

How Policymakers Reached This Point

The “methodology” behind this shift is cumulative and empirical:

• Historical price data showing repeated boom-bust cycles in rare earth oxides.
• Case studies of stalled or abandoned non-Chinese refining ventures following price collapses.
• Supply-chain mapping demonstrates that even when mining occurs outside China, separation and refining often remain Chinese-controlled.
• Geopolitical stress tests, including export controls, informal quotas, and strategic signaling by state-aligned Chinese firms.

Helberg’s remarks indicate that U.S. officials increasingly see price instability itself—not geology—as the central bottleneck to diversification.

Jacob Helberg, 22nd Under Secretary of State for Economic Affairs

Why Price Volatility Matters

Rare earth markets do not behave like competitive commodity markets. China’s position allows it to:

• Flood markets during Western project development, depressing prices.
• Sustained losses longer than private competitors due to state backing of key enterprises.
• Reassert pricing power once competitors exit.

A coordinated pricing mechanism could smooth revenue expectations, making long-cycle investments in refining and separation rational rather than speculative.

But A Bigger Reality: Pricing Alone Is Not Enough

Rare Earth Exchanges™, since our launch in late 2024, has consistently argued that price alignment is necessary—but far from sufficient—to catch China. China’s advantage is systemic. It spans mining, separation and refining, metallurgy, magnet manufacturing, end-use integration, and workforce depth. Without a broader industrial policy, price coordination risks becoming a partial fix to a structural problem.

A credible allied strategy would also require:

Policy Move	Description	Strategic Rational
Targeted Subsidization Across the Value Chain	Direct financial support not only for rare earth refining and separation, but also for custom magnet development serving defense systems, electric vehicles, wind turbines, robotics, and advanced electronics	China’s advantage is not just in raw materials, but in of course refining and application-specific magnets. Without subsidies, Western firms struggle to justify the long development cycles and thin early margins required to compete
Allied Vision and Orchestration	Formal alignment among the U.S., Canada, EU, Japan, Australia, and other partners around shared priorities, standards, and investment sequencing—rather than fragmented national strategies	China operates a coordinated national system. Disconnected Western efforts dilute capital, duplicate mistakes, and slow progress. Alignment concentrates resources where they matter most
Workforce and Talent Development	Long-term investment in training metallurgists, chemical engineers, magnet designers, and process specialists through universities, apprenticeships, and industry partnerships, not to mention aggressive recruitment from abroad	This is arguably the most underappreciated constraint. China spent decades building human capital. And as REEx reports the nation continues to intensify that effort. Facilities and subsidies alone cannot function without skilled people to run and improve them
Securing Critical Inputs and Chemicals	Ensuring reliable access to acids, solvents, reagents, and other specialty chemicals essential for refining and separation—many of which are currently China-dominated	Even non-Chinese refineries can be vulnerable if they rely on Chinese-controlled upstream inputs, recreating dependency through another bottleneck
Downstream R&D Investment	Expanded funding across national laboratories, universities, and private firms to advance metallurgy, sintering, recycling, and next-generation magnet and other rare earth and critical technologies across energy, defense, transportation, life sciences and more.	China continuously improves yields, performance, and cost through applied R&D. Without comparable downstream innovation, Western producers risk permanent second-tier status
Tighter Government Coordination	Streamlined alignment across agencies such as the Department of Defense (War), Department of Commerce, and Department of Energy, as well as EPA and others—plus allied counterparts—on funding, mandates, and timelines	Fragmented oversight slows execution. China’s system works because policy, procurement, and industry move together. Western agencies must coordinate to match speed and scale

Industrial policy remains controversial in market-oriented societies. But the rare earth sector is no longer a theoretical market—it is strategic infrastructure, akin to semiconductors or defense systems.

Implications and Risks

If implemented as part of a broader strategy, allied price coordination could revive stalled projects across the U.S., Australia, Canada, and Europe, and reduce dependence on China over time.

But risks remain:

• Market distortion concerns and potential misallocation of capital.
• Execution complexity across dozens of allied governments.
• Trade retaliation, including further Chinese export controls.
• Legal scrutiny under international trade rules, depending on the design.

A Necessary Pivot, Not a Silver Bullet

Helberg’s remarks mark a meaningful shift in Western thinking: rare earths are no longer treated as ordinary commodities but as strategic assets requiring coordinated intervention. Price stability is a critical first step. Yet without a comprehensive industrial policy—spanning talent, technology, inputs, and allied coordination—it will not be enough to dislodge China’s systemic advantage. The challenge now is a change in the Western mindset, the vision, execution, alignment, and political will.

Why Jacob Helberg’s Background Matters for Rare Earth Strategy

Jacob Helberg brings an unusually relevant blend of national security, technology policy, and China-focused economic strategy to his role as U.S. Under Secretary of State for Economic Affairs—making his views on rare earth pricing and allied coordination especially consequential. Before his current post, he advised the White House Council of Economic Advisers and served as a Commissioner on the U.S.–China Economic and Security Review Commission (2022–2024), where he pushed for tariffs, industrial independence, and reduced strategic reliance on China, placing him squarely at the intersection of economic policy and national security that defines the rare earth challenge today. He also founded the Hill & Valley Forum, which bridges Silicon Valley and Capitol Hill—an experience directly relevant to rare earths, which require tight coordination among technology firms, lawmakers, and defense stakeholders. Earlier roles as senior advisor to the CEO of Palantir Technologies and as global lead for Search policy at Google gave him firsthand exposure to how strategic technologies scale—or fail—under regulatory and geopolitical constraints. Consistent with this trajectory, his 2021 book The Wires of War (opens in a new tab) frames competition with China as systemic rather than transactional, arguing that technological dominance drives global power—an outlook that aligns closely with rare earths, where China’s advantage stems less from geology than from long-term industrial planning, workforce development, and coordinated state action, making Helberg’s push for allied price coordination a logical extension of his broader work on U.S.–China economic competition.

Source: Eastland, M., Bloomberg News, January 29, 2026.