Much of the United States’ military power is built on rare earths, critical minerals essential to advanced weapons systems and high-tech defense equipment, whose global supply chains are overwhelmingly controlled by China. As Christina Lu, energy and environment reporter at Foreign Policy, notes, these elements are woven into the very core of US defense manufacturing.

Each Lockheed Martin F-35 fighter jet contains more than 920 pounds of rare earths. Arleigh Burke-class guided missile destroyers require over 5,700 pounds, while each Virginia-class submarine needs more than 10,000 pounds, figures from consultancy Benchmark Mineral Intelligence show.

“They’re in every form of defense technology,” said Gracelin Baskaran, director of the critical minerals security program at the Center for Strategic and International Studies (CSIS) in Washington. “They’re in warships, fighter jets, missiles, lasers, tanks, satellites, drones, in everything.”

Currently, China controls about 85% of global rare-earth processing and more than 90% of magnet production, maintaining a near-monopoly on heavy rare-earth separation. Beijing has leveraged this dominance against Washington, adding to previous export restrictions on extraction, separation, and magnet-making technologies.

China controls permanent magnets, key to US weapons production

Since US President Donald Trump initiated his trade war in April, both governments have spent months negotiating Beijing’s exports of minerals. Still, China retains significant leverage. According to The Wall Street Journal, the country has slowed shipments of key materials, including rare earths, to Western defense firms, causing delays and pushing up costs.

“We’re effectively having to ask China’s permission to build our weaponry because they control the permanent magnet supply chain,” said Ashley Zumwalt-Forbes, a former US Energy Department deputy director for batteries and critical minerals under the Biden administration. “That’s a very dangerous position.”

Despite their name, rare earths are not scarce in nature. The group of 17 elements, with names such as neodymium and lanthanum, is widely distributed globally, though finding economically viable deposits is more difficult.

The United States was once a leading producer, but decades ago, environmental concerns and financial pressures pushed lawmakers to outsource the sector. In 1996, the US Bureau of Mines, once a central research agency, was shut down. Today, MP Materials’ Mountain Pass mine and processing facility in California is the country’s only operational rare-earth site.

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While Washington stepped back, China invested heavily in its rare-earth industry over decades, cementing a grip on supply chains and pricing that makes market entry challenging for rivals. In April, Beijing responded to Trump’s trade war by imposing export controls on seven types of rare earths and magnets. The two countries later agreed to a 90-day truce. 

Ahead of the deadline, US Trade Representative Jamieson Greer told Bloomberg, “We’re focused on making sure that magnets from China to the United States and the adjacent supply chain can flow as freely as it did before the control. And I would say we’re about halfway there.”

"There is no alternative" to China

Successive US administrations have sought to address the vulnerability. During Trump’s first term, the White House ordered a review of risks from dependence on foreign adversaries for critical minerals and boosted funding for domestic rare-earth ventures. President Joe Biden expanded the national stockpile and used the Inflation Reduction Act to incentivize US- or allied-sourced materials. Both leaders have invoked the Defense Production Act to accelerate domestic production for national security purposes.

Yet the dependency remains acute. “More than 95% of rare earth materials or metals come from, or are processed in, China. There is no alternative,” Raytheon CEO Greg Hayes told the Financial Times in 2023. “If we had to pull out of China, it would take us many many years to re-establish that capability either domestically or in other friendly countries.”

The Pentagon is now stepping up its efforts, having invested nearly $540 million in critical minerals projects in recent years, according to Reuters. In its most ambitious move yet, the Defense Department signed a multibillion-dollar deal to become the largest shareholder in MP Materials. The agreement includes building a rare-earth magnet factory by 2028, with the US government buying its output and setting a price floor to protect against market volatility.

“We are up against China, which has a very interventionist minerals policy in production and processing, in offtake for downstream industry,” Baskaran of CSIS said. “For the United States to be competitive with China, [it] is going to require a more interventionist model. And this is a big step toward countering China.”

China holds a strong lead in rare-earth metals expertise 

From 2027, the Pentagon will require defense contractors to source magnets free of China-origin minerals, The Wall Street Journal reported.

But establishing a fully domestic mine-to-magnet supply chain will take time, requiring not only mining but also separation and production infrastructure, areas where China holds decades of experience.

“The disparity in the intellectual firepower in China versus the United States with respect to these metals is pretty severe,” said Chris Berry, president of House Mountain Partners, an independent metals consultancy.

Meanwhile, China is continuing to advance its position, expanding operations in rare-earth-rich Myanmar and developing a formal registry of rare-earth experts to prevent knowledge transfer abroad. In 2023, Beijing recorded its highest number of overseas mining acquisitions in more than a decade, Financial Times data shows. 

“China is not doing business differently, they are just doing more of it,” Baskaran said.