Overview

• President Trump has directed the Commerce Department to investigate the national security implications of U.S. reliance on imported critical minerals, potentially paving the way for new tariffs.
• China has imposed export restrictions on seven rare earth elements, halting shipments and exacerbating supply chain vulnerabilities in defense and technology sectors.
• The U.S. produces minimal amounts of critical minerals domestically, with limited mining and processing infrastructure, leaving it heavily dependent on foreign sources, particularly China.
• Efforts to establish a domestic 'mine-to-magnet' supply chain are progressing slowly, with full capacity development targeted by 2027 but facing regulatory and environmental hurdles.
• The escalating trade conflict underscores the strategic importance of rare earths, as both nations leverage tariffs and export controls to exert economic and geopolitical pressure.