President Donald Trump signed an executive order on Tuesday launching a national security investigation into the U.S. reliance on imports of critical minerals, after China suspended exports of certain rare earth metals and magnets.
“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,” the White House said.
Why It Matters
China has for years exercised an effective monopoly over global rare earths, and decoupling the U.S. from this supply has become a central aspect of President Trump’s foreign policy during his second term, informing the administration’s approach to countries from Ukraine to Greenland.
As well as seeking to minimize China’s rare earths leverage, Trump’s move also heralds an even tighter crackdown on Chinese imports, and represents the latest measure against Beijing in the escalating trade war.
What to Know
As well as placing its own tariffs on U.S. imports, China has increasingly sought to take advantage of its control of global rare earths and America’s reliance on these.
In December, China’s Commerce Ministry announced that it had banned the export of certain metals in response to the U.S.’s decision to strengthen export restrictions on equipment and software related to its semiconductor industry.
On April 4, following Trump’s “Liberation Day” tariff announcements two days earlier, Beijing ordered restrictions on the export of six heavy rare earth metals, refined entirely in China, as well as rare earth magnets, the vast majority of which are produced in China. Analysts warned that this move could pose a threat to American manufacturers as well as the country’s arms industry and national security more broadly.
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China was the only country specifically excluded from the recently announced pause on reciprocal tariffs, which the administration said was due to its retaliatory measures, and the White House has said is now subject to “up to a 245 percent tariff” on its imports as a result of these.
While the White House said that its investigation would focus on the national security implications of an “overreliance on foreign critical minerals” generally, it noted China’s December ban on exports to the U.S. of gallium, germanium, antimony, and other “key high-tech materials with potential military applications,” as well as its recent export restrictions.
The Trump administration said that a forthcoming national security 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 [critical minerals].” This will culminate in a report providing recommendations to “strengthen domestic production, reduce dependence on foreign suppliers, and enhance economic and national security.”
What People Are Saying
Responding to China’s restrictions on minerals, Josh Ballard, CEO of rare earth and critical mineral development company USA Rare Earth, told Newsweek that China’s recent export restrictions would have a profound impact on the U.S. economy.
“Your life as you know it would cease to exist without magnets. Neo magnets are in laptops, cell phones, motors, drones, medical devices, and many other items we use every single day. These powerful, small, high-energy magnets are essential to our technology. Impacted industries include defense, automotive, aviation, industrial, medical and consumer electronics industries.”
“The rare earth metals market is roughly a $16B market, and magnets about $20B,” he added. “But they have a knockdown effect on much larger industries. If China were to cut off supply to NdFeB magnets, or even just the supply of the heavy rare earths dysprosium and terbium, you would no longer be able to produce EVs. There are important uses in defense technologies, medical devices – MRI machines rely on them, for example—cell phones, computers, servers, power tools, drones, robotics, wind turbines…the list is very long.”
Gracelin Baskaran and Meredith Schwartz, analysts at the Center for Strategic and International Studies said that China’s export restrictions on rare earths would further inhibit America’s ability to develop certain next-generation military technologies.
“The United States is already on the back foot when it comes to manufacturing these defense technologies,” the pair wrote on Monday. “China is rapidly expanding its munitions production and acquiring advanced weapons systems and equipment at a pace five to six times faster than the United States.
“While China is preparing with a wartime mindset, the United States continues to operate under peacetime conditions. Even before the latest restrictions, the U.S. defense industrial base struggled with limited capacity and lacked the ability to scale up production to meet defense technology demands. Further bans on critical minerals inputs will only widen the gap, enabling China to strengthen its military capabilities more quickly than the United States.”
China’s Ministry of Commerce, paraphrased by CCP newspaper Global Times, said that: “The Chinese government has implemented these export controls on relevant items in accordance with the law to better safeguard national security and interests and fulfill international obligations related to non-proliferation.”
“The relevant items have dual-use natures, and implementing export controls on them is a common international practice… As a responsible major country, China’s decision to regulate these items reflects its consistent stance on maintaining world peace and regional stability. China is willing to enhance communication and cooperation through bilateral export control dialogue mechanisms, promoting compliant trade.”
What Happens Next
In the Tuesday executive order, President Trump said that the Secretary of Commerce would submit a report within 90 days of the investigation for review by other officials including the Secretary Secretary of Defense and the U.S. Trade Representative. A final report, alongside recommendations to the president, is expected to be submitted within 180 days from the start of the investigation.
The White House stated that if the Secretary of Commerce’s report determines that imports of critical-mineral articles pose a threat to national security, the president may impose a tariff rate on certain countries, replacing the reciprocal tariff rates announced on April 2. It cited the executive authorities granted under Section 232 of the Trade Expansion Act of 1962, which allows the president to impose trade restrictions, including tariffs, as part of national security measures
