Get Ready: China's Rare Earth Restrictions and Trump's Critical Minerals Order

(Editor's note: This is the first of a series on options for critical minerals)

Written by Paul Wiseman for Industrial Info Resources (Sugar Land, Texas)--Technically, China is not banning its exports of seven of the 17 minerals categorized as rare earth elements (REEs). As of April 4, China was requiring potential exporters to get special export licenses to send the seven minerals, as well as magnets, out of the country.

China is a signatory to the international treaty on the non-proliferation of nuclear weapons, and as such has the ability to control exports of these elements, which are considered "dual use." While they can be used in the making of general products like Tesla vehicles, they are also critical in the manufacture of nuclear weapons.

Minerals defined as REEs are not actually rare, they're just scattered thinly around the earth. What's rare is to find them in economically recoverable quantities, and this is something China has a monopoly on, for the most part. The seven in question--samarium, gadolinium, terbium, dysprosium, lutetium, scandium, and yttrium--are considered "heavy" REEs compared to the other 10. They are also the seven for which, unlike the other 10, there are few sources outside of China.

How important are these minerals? It's a big deal in several areas, but national defense comes to the top. According to the Center for Economic and International Studies (CSIS), "The F-35 fighter jet contains over 900 pounds of REEs. An Arleigh Burke-class DDG-51 destroyer requires approximately 5,200 pounds, while a Virginia-class submarine uses around 9,200 pounds."

The U.S. has seen embargoes of needed materials before--notably the oil embargo of 1974-75--but in that case, the nation had a significant oil and gas supply of its own, although far from enough to power the nation.

Political analysts have been warning about this for years, and even before the official export tightening by China, U.S. President Donald Trump had promised to empower his administration to investigate the REEs issue and offer analysis and solutions.

On April 15, Trump signed an executive order that, according to a White House fact sheet, "directs the Secretary of Commerce to initiate a Section 232 investigation under the Trade Expansion Act of 1962 to evaluate the impact of imports of these materials on America's security and resilience," among other things.

It adds, "This investigation will assess vulnerabilities in supply chains, the economic impact of foreign market distortions, and potential trade remedies to ensure a secure and sustainable domestic supply of these essential materials." Should they be found critical, the president may take further tariff action, the fact sheet said.

To many analysts, the facts are already obvious--they are very critical. According to the U.S. Geological Survey (USGS), "The estimated value of rare-earth compounds and metals imported by the United States in 2024 was $170 million, an 11% decrease from $186 million in 2023." It's down a bit, but the USGS points out that, in 2023, China accounted for 68.5% of the world's rare earth mining (240,000 of 350,000 metric tons). And in 2024, China accounted for 69.2% of world's rare earth mining (270,000 of 390,000 metric tons) and 75% of its increase (30,000 of 40,000 metric tons).

China accounted for 70% of U.S. REE imports from 2020-23, said the agency. The imports also include 13% from Malaysia, 6% from Japan, 5% from Estonia and the last 6 % from other nations.

Currently, only very small amounts of any REE minerals are mined in the U.S. As recently as the 1980s, the U.S. led the world in REE processing, but domestic companies left the market as the Chinese began to build their dominance.

As the CSIS reports, the Department of Defense has already identified domestic processing as a need. As such, it has awarded grants for creating such facilities including the processing of neodymium-boron-iron (NdFeB) magnets. But, even if the facilities are built, by the end of 2025 they would be producing less than 1% of the magnets that were produced by China in 2018.

Next, Industrial Info will delve more deeply into the U.S.'s other options, including domestic production/processing and other nations looking to exploit their resources.

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