China’s announcement last week of sweeping new curbs on rare-earth elements signaled a new stage in the economic showdown with Washington—one in which Beijing is willing to weaponize its overwhelming advantage in the global supply of critical minerals.
Why It Matters
The new restrictions, announced by China’s Ministry of Commerce, will prohibit U.S. defense contractors from receiving Chinese rare-earth materials and ban the export of technologies related to extraction, processing, magnet production, and equipment servicing. For the first time, they will also apply to products that use Chinese components, even those already exported.
China accounts for over two-thirds of global rare-earth output—a group of 17 metals critical for manufacturing technologies ranging from electric vehicle motors and radar systems to the semiconductors that power artificial intelligence. Analysts say China’s dominance in this field has eroded the U.S.’s competitive edge, prompting both the Biden and Trump administrations to respond with their own export restrictions and industrial incentives.
Newsweek reached out to the Pentagon and White House via e-mailed request for comment outside of office hours.
What To Know
Washington has taken a number of moves in recent years aimed at eventually reducing its dependence on Chinese minerals.
Pentagon Strikes Landmark Deal With MP Materials
The Pentagon became the largest shareholder of MP Materials, in a $400 million public-private partnership. The deal is expected to support the expansion of the Las Vegas-based rare-earth materials firm's operations. These include its Texas facility—already producing limited volumes—and a planned second, larger plant.
White House Order Accelerates Mining and Processing Projects
In March, President Donald Trump signed an executive order mandating agencies to fast track mineral production permits and open federal lands to mining, a broad move aimed at revitalizing U.S. supply chains for critical minerals—including rare earths. The order invoked the Defense Production Act and redefined mineral development as a national security priority.
Lynas USA Secures Funding for Rare Earth Refining in Texas
The Pentagon pledged some $258 million to Australia-based Lynas Rare Earths to build light and heavy rare-earth refining capacity in Texas. The project would make Lynas the first non-Chinese company to separate heavy rare earths at a commercial scale inside the U.S. amid efforts to work with allies to counter China's dominance.
Biden Review of American Supply Chains
Shortly after taking office, former President Joe Biden ordered a 100-day review of critical mineral supply chains, including rare earths. The resulting report identified major U.S. vulnerabilities and recommended federal investment, permitting reform, and expanded partnerships with allied suppliers, laying the groundwork for many of the current industrial investments.
What People Are Saying
Pini Althaus, critical minerals expert and CEO of New York- and Melbourne-based investment firm Cove Capital, said in a statement shared with Newsweek: "Kudos to President Donald Trump and his administration for staying focused on rebuilding a resilient mine-to-manufacturing critical minerals supply chain. Beijing’s latest rare-earth export controls are a reminder that over-reliance invites strategic pressure; the answer is to mine, refine, and manufacture with allies, not dependency."
China’s Embassy in the Washington, D.C., said in a statement shared with Newsweek: "China’s position on the trade war is consistent: we do not want it, but we are not afraid of it. China urges the U.S. to promptly correct its wrong practices, adhere to the important consensuses of the phone calls between the two heads of state, protect the hard-won outcomes of consultations, continue to use the China-U. S. economic and trade consultation mechanism, and address respective concerns and properly manage differences through dialogues and on the basis of mutual respect and equal-footed consultation."
What Happens Next
Trump has threatened to raise tariffs on Chinese imports to 100 percent from the current 30 percent baseline, among "many other countermeasures."
China’s new export curbs will take effect on December 1. It remains to be seen whether the U.S. and Chinese leadership can agree to a trade deal—or at least a framework to walk back escalating restrictions. Trump has said he expects to meet with Xi on the sidelines of the Asia-Pacific Economic Cooperation summit in South Korea later this month, according to Treasury Secretary Scott Bessent.
Newsweek