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U.S. Reliance on China for Critical Minerals Intensifies Amid Export Curbs
Washington’s dependency on Beijing for critical minerals, including rare earths, is under renewed scrutiny as China tightens export controls. This action further illuminates the vulnerability of global supply chains, a concern highlighted three years prior when the U.S. government identified 50 minerals as “critical” following pandemic-induced disruptions. The United States imports over half of these essential resources, with a significant portion, including 17 rare earth elements, originating from China. Recent Chinese export restrictions on six rare earth minerals are poised to significantly impact U.S. access to vital supplies.
China’s Dominance in Mineral Refining
China’s influence extends beyond merely mining a majority of the world’s rare earths; it also possesses the largest global capacity for refining these materials. The refining process transforms raw minerals into usable compounds for diverse industrial sectors, from battery and semiconductor manufacturing to fiber optics and essential components like power steering magnets in vehicles.
The Significance of Rare Earths
Rare earth minerals possess unique chemical attributes, including heat resistance, making them indispensable in producing high-performance magnets, specialized glass, advanced lighting, and batteries. Notably, magnets derived from rare earths are considerably more potent and valuable, particularly in the burgeoning electric vehicle market.
China’s dominance in this sector is underscored by its production of 90 percent of rare earth magnets, which are also subject to the recently imposed export limitations.
Consequently, a substantial part of modern technology critical for communication networks, energy generation, and national defense relies on China’s capabilities in extracting and processing these crucial minerals.
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The Department of Defense estimates that approximately 900 pounds of rare earth materials are incorporated into each F-35 fighter jet, while some submarines require over 9,200 pounds. Demand for critical minerals is projected to surge in the coming years, fueled by the expansion of electric vehicle production and the growth of data centers supporting artificial intelligence technologies.
Geopolitical Leverage and Trade Tensions
China has a history of leveraging its control over mineral resources for geopolitical influence. In 2010, during a period of heightened tensions with Japan over maritime borders, China restricted rare earth mineral exports to Japan for seven weeks.
Expanding Mineral Restrictions
Prior to the latest restrictions, China had already limited U.S. access to four additional critical minerals—gallium, germanium, antimony, and graphite—in response to previous U.S. tariffs on Chinese products. These minerals are vital for chip manufacturing and have applications in semiconductors, military explosives, and other weaponry.
Consolidating Control and Seeking Alternatives
In recent years, Chinese state-controlled enterprises have acquired all foreign-owned rare earth refineries within the nation. Furthermore, Beijing has classified its rare earth mining and refining methodologies as state secrets, further solidifying its control over production and export.
In contrast to the U.S., numerous Chinese universities offer specialized programs in rare earth mining and refining. China has also pioneered technologies enabling its companies to achieve significantly lower extraction costs compared to global competitors.
“The developments in 2025 further emphasize the U.S. desire to diversify its supply chains away from China, a shift that requires time,” noted Andrew Foran, an economist at TD Bank specializing in mineral trade between the U.S. and China.
Diversification Efforts and Domestic Production
Certain critical minerals, such as nickel and lithium, are more readily available than rare earths. American mining firms have been actively involved in domestic and international extraction for years, though their output remains considerably smaller than that of Chinese counterparts.
Rare earths, conversely, face more constrained supply chains and are often more challenging to extract, necessitating complex separation processes. The United States currently operates a single rare earth mine in Mountain Pass, California, responsible for approximately 15 percent of global rare earth production. A recent executive order from the prior administration aimed to bolster domestic mineral production through expedited permitting and project financing.
However, the U.S. lacks domestic reserves for many critical minerals, necessitating the establishment of new trade partnerships to reduce reliance on China. Past administrations have explored avenues to enhance U.S. access to critical minerals and rare earths through agreements with nations such as Ukraine and the Democratic Republic of Congo, and potential resources in Canada and Greenland have also been considered.
Anticipating potential trade disputes, some American companies have been stockpiling rare earths. However, the varying sizes of these reserves make it difficult to predict the precise impact of production disruptions.