Rare earths are China’s bargaining chip in the trade war — the U.S. is trying to fix that
Investment
CNBC

Rare earths are China’s bargaining chip in the trade war — the U.S. is trying to fix that

July 29, 2025
12:00 PM
4 min read
AI Enhanced
investmentstocksfinancialtechindustrialsmarket cyclesseasonal analysisgeopolitical

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China mines around 70% and processes around 90% of rare earths. The U.S. is hoping to change that with investment in the domestic rare earth supply chain.

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4 min read

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investment

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Published

July 29, 2025

12:00 PM

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CNBC

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investmentstocksfinancialtechindustrialsmarket cyclesseasonal analysisgeopolitical

What the data shows is Interestingly, In this articleAAPL7269

T-JPFGSJPMRIVNGMUUUUTSLAMPMETC your favorite stocksCREATE FREE ACCOUNTRare earths refer to 17 elements on the periodic table whose atomic structure gives them special magnetic perties, in this volatile climate

Moreover, They're also the most important bargaining chip in the U, in this volatile climate

That's because these rare earth magnets power everything from electric vehicles and wind turbines to defense equipment, data centers and high- consumer electronics

Nevertheless, At the same time, The United States used to be an industry leader of rare earth duction, but for the last several decades, the U

And the rest of the world have largely dep on China for the majority of their rare earths — China mines around 70% and cesses around 90% of rare earths, in today's market environment

Furthermore, "China has had the monopoly in this market for a really long time, and that monopoly has only increased," said Neha Mukherjee, rare earths re manager at Benchmark Mineral Intelligence, in this volatile climate

Conversely, "The cost of duction of these separated rare earths and magnets is very low in China, and any ducer outside of China cannot enter the market because these prices are what we called as sub-rational prices

Nevertheless, "In the last several months, rare earths have transformed into a powerful weapon in the trade war between the U, given the current landscape

On the other hand, The export controls that China placed on rare earths in April disrupted a number of industries, with the auto sector being particularly hard hit

However, "China has slowly built out this export control toolkit, really mimicking and copying U

However, Export controls to hit back at U (an important development)

And other countries for actions that China believes are unfair," said Dewardric McNeal, a managing director at Longview Global and a CNBC contributor

In contrast, "Although we are seeing it actualized over the last seven months, China has spent the last several years building out this tool kit (which is quite significant). "The United States seems to be getting serious establishing a domestic rare earths supply chain, in light of current trends

In July, the Department of Defense announced a $400 million investment in MP Materials, an American rare earth miner and ducer, in light of current trends

Additionally, MP Materials owns the only operational rare earth mine in the U

At Mountain Pass, California

Goldman Sachs and JPMorgan also backed the company with a $1 billion loan to fund the expansion of MP Materials magnet-making operations

Other jects are also advancing, amid market uncertainty

Energy Fuels began refining rare earths five years ago at its White Mesa facility in Utah

The company has historically mined and refined uranium, a radioactive material, and realized it could use a similar cess to extract rare earths from monazite, considering recent developments

Moreover, The company duces neodymium-praseodymium oxide, or NdPr material, at commercial scale for use in permanent magnets, but says that it can expand its offerings to include other rare earth elements with the right financial support

Furthermore, The company is already running pilot scale duction of some of those other rare earth oxides

Moreover, "Right now, we have the capability to cess up to a thousand [metric] tons of NdPr

Our plans are in what we call phase two, to increase that up to 6,000 [metric] tons of NdPr, which would be up to 6 million electric vehicles," said Energy Fuels CEO Mark Chalmers. "We also have the capabilities, and are advancing our abilities to duce a number of the other heavy rare earths, mainly dyssium, terbium and samarium and other elements as required by the United States government

If they choose to have us recover those ducts in due course with the per incentives. "Despite such gress, experts say that the U

Is far from its dependence on China for rare earth materials, given the current landscape

Watch the to learn more.