Mining is found at Bayan Obo mine, which contains rare earth minerals in China's internal Mongolia.
China Stringer Network | Reuters
In April 2025, China imposed new export controls on seven rare earth elements and their permanent magnets. This is the material that forms the basis of modern life and modern warfare. Fighter jets, missiles, electric vehicles, drones, wind turbines, and even data centers rely on high-performance magnets made from these important minerals. By limiting their flow, Beijing not only bends the muscle of the industry, but also reveals dangerous vulnerabilities in America and the world. China's latest actions demonstrate its preparation and ability to weaponize America and global dependence.
This is not a new challenge. For over 15 years, the US knows that its critical mineral supply chain has been too concentrated, fragile and exposed to Chinese leverage and control. Still, beyond Democrats and Republican administrations, we were unable to respond with urgency or consistency. Currently, the consequences of these obstacles grab us in the neck and cascade in the commercial and defense sectors.
Following the London speech, Washington and Beijing announced on Friday a new trade framework will allow China to resume approval of rare earth export licences over the next six months. While US officials publicly praise the breakthrough, they provide little details about what was given in return. It leaves the main question unanswered: What was the US trade-off? How will the transaction be enacted? And what happens when the six months increase?
Scepticism is high. Ford recently stopped production at its Chicago plant due to a lack of magnets. It emphasizes that even short-term supply disruptions can have real consequences. Paper agreements are not supply chain solutions. Without transparency, timely approval, and long-term planning, this could easily become another diplomatic cycle, one step ahead.
Even this limited grace takes risks. Dozens of companies in Europe and North America have described China's export licensing process as highly invasive. This requires companies to submit detailed production data, end use, facility images, customer names, and transaction history. Some applicants have been rejected for not providing end-user photos or documents.
Executives say the process is equivalent to “official information extraction.”
While companies are advised not to share sensitive IPs, omitting important details can mean indefinite delays. For companies in the defense supply chain, the meaning is surprising. You can use valuable commercial information to advance competitor mapping, price breakdown, or Chinese alternatives.
This is not just a license, it's a competitive surveillance. And it remains exposed to both disruption and data risk until the US builds safe and independent capabilities across its critical mineral supply chains.
This vulnerability did not occur overnight. Many have seen this slow motion train wreck for years. In 2010, China blocked rare earth exports to Japan during a maritime dispute. In 2014, the Obama administration won a WTO lawsuit over China's export restrictions, but mistakenly assumed that legal success would block further manipulation.
What Trump and Biden did
The first Trump administration identified rare earths as important, but was exempt from China's tariffs in particular in 2018. Biden has taken the most structured approach ever. This is funded by executive order 14017, IIJA and IRA, which are key mineral working groups. Strategic partnerships like Minerals Security Partnership have emerged. However, progress was slow and hampered by allowing delays and uneven ally commitments.
The second Trump administration has returned with more aggressive measures. It called section 232 to propose an activation of the Defense Production Act and increased major funding in 2026. The National Energy Control Council is currently coordinating its efforts. However, these measures still fall short of removing Beijing's grip, like China's six-month reprieve. And importantly, the defense division remains blocked and such license windows are not available.
The recent G7 Summit in Canada highlighted global interests. European Commission President Ursula von der Leyen directly accused China of “weaponizing” control over key materials such as rare earths and seeking a unified G7 response. Results: G7 Critical Mineral Action Plan. China was not mentioned by name, but the subtext was unmistakable. The plan commits to G7 members to raise ESG and traceability standards for key resources. Mobilize capital for new projects in critical mineral extraction and processing. We will cooperate in innovating recycling, replacement and refinery technologies.
As expected, Beijing responded to anger. China's Foreign Ministry dismissed the plan as a “pretty” for protectionism, claiming that the G7 was incited conflict due to fears of losing market share.
Brussels now shows that trade negotiations with Beijing are stagnating effectively, so the possibility of China's retaliation — especially against the EU — is on the rise. If China doubles, there is a risk that it will push the EU, Japan, South Korea and India more strongly into Washington's orbit. That's exactly what Beijing wants to avoid.
China's dominant position in rare earth mining
The raw numbers are incredible. China accounts for about 70% of the world's rare earth mining, but accounts for more than 90% of its refinement capacity. It produces 92% of the world's neodymium ironworm (NDFEB) magnets used in everything from submarines to Teslas. This domination is no coincidence. China will subsidize processing focused on global acquisitions across the supply chain, expanding production much faster than the West can approve and issue a single mine permit.
US sites like MP Materials“The mountain path and round top remain incomplete without downstream processing. DOD and DOE are providing grants, and the Trump budget for 201026 appears to expand the US mining capacity and ensure access to critical minerals. However, this all remains war-raised by the head start of China and the sector's longstanding industrial command and control.
Mountain Pass Rare Earth Mine & Processing Facility owned by MP Materials in Mountain Pass, California.
George Rose | Getty Images News | Getty Images
Early on, China moved decisively to Africa and Latin America, partnering with governments in the Democratic Republic of the Congo, Bolivia and Chile. Investments in ports, rails and refinery infrastructure. In contrast, US efforts and involvement on these sets of issues are fragmented and valuable, prioritizing transparency and governance, achieving key issues, but bringing limited momentum to key mineral issues. Even the recent Mous with Ukraine and the Democratic Republic of the Congo is symbolic for now, and is hampered by the conflicts and instability of those countries.
The London story and recent progress on trade contracts bought time. However, time without strategies is not fruitful. China's licensing regime remains the same, and the data is requested without waning. The defense department remains locked out. Meanwhile, the Congressional threat to withdraw funding for clean energy and industrial policy could halt rare earth projects just as they would when they gain traction.
This is a critical moment. China bets that the internal American sector between labor, industrialists, environmentalists, tribal states and political factions will prevent the unified and sustained efforts needed to compete. They may be right. The US needs to prove they're wrong.
The important minerals are geopolitical forces.
The US now has to treat important minerals not as commodities, but as tools of geopolitical power. China has already done so. It takes more than my permission and short-term funds to escape the grip. It calls for a consistent long-term strategy to build a complete supply chain that includes not only domestic capabilities but also trustworthy allies and partners. From mining and improvement to magnet production and recycling, all links need to be strengthened through targeted investments, reform permits and strategic adjustments.
Successful sustainable policies require commitment from one presidency to the next. Furthermore, the United States cannot afford to engage allies or partners solely rhetorically. Countries such as the Democratic Republic of Congo, Chile and Indonesia (particularly) need not only lectures on governance, but also sustainable partnerships backed by funding, technology transfer and critical infrastructure investments.
A six-month export deferral from China is not a solution, it is a stress test. It reveals whether the US can ultimately act in a focus or whether it will retreat complacently again. Beijing bets that it will be the latter. Washington must respond with strategies equal to the urgency, unity and challenges. There's still time, but not much.
– By Dewardric McNeal, Managing Director and Senior Policy Analyst at Longview Global, and by CNBC contributors