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Washington, June 12: As trade tensions deepen between Washington and Beijing, the Trump administration is weighing the use of emergency defense powers to reassert control over a vital but often overlooked sector: rare-earth elements. These obscure minerals underpin much of modern life—from fighter jets to smartphones—and right now, the U.S. relies almost entirely on China to supply them.
White House Eyes Cold War-Era Law to Rebuild Supply Chain
According to officials familiar with internal deliberations, the administration is considering activating the Defense Production Act (DPA) to jumpstart rare-earth mining and processing projects within the United States. Originally enacted in 1950, the DPA allows the federal government to prioritize certain industries for national defense.
The move follows months of pressure from defense planners and energy officials who view the U.S. reliance on Chinese supply chains as a strategic risk. “It’s not just a supply issue anymore. It’s a sovereignty issue,” said one person involved in policy discussions, who asked not to be named given the sensitivity of the matter.
The plan could unlock federal financing and streamline permitting for key projects, but it has yet to receive a formal green light from the White House.
Spotlight on MP Materials as Momentum Builds
One company watching the developments closely is MP Materials Corp., which owns and operates the Mountain Pass mine in California—the only rare-earth production site of significance currently active in the U.S.
According to sources with knowledge of the discussions, Deputy Defense Secretary Steve Feinberg is overseeing efforts to channel funding into MP Materials as part of the broader supply chain overhaul. The company has already received federal grants and is seen by defense officials as a linchpin for America’s bid to regain processing capacity that has long since moved offshore.
Shares in MP Materials surged by more than 16% following reports of renewed government backing, signaling investor confidence that the company could play a central role in the post-China strategy.
Beijing’s Export Restrictions Force Urgency in Washington
China’s decision earlier this year to tighten export controls on several heavy rare earths—specifically those used in missile guidance systems and electric vehicles—was a turning point. While Beijing insists the new rules are about national security, officials in Washington see them as a form of economic leverage.
“China holds the choke point in the rare-earths supply chain,” said Doug Burgum, the U.S. Interior Secretary and chairman of the National Energy Dominance Council. “They don’t just mine it. They control the refining. That’s where we’re vulnerable.”
Despite a temporary easing of restrictions last month, U.S. officials say the underlying risk remains. Permit requirements for exports are now significantly more stringent, and many American companies—particularly in the defense and aerospace sectors—are growing anxious about reliability.
Internal Strategy Led by Veteran Miner-Turned-Bureaucrat
Coordinating the administration’s response is David Copley, a former executive at Newmont Corporation, who now serves as the administration’s point person on critical minerals. Copley is overseeing a list of federally backed projects that could be fast-tracked under the DPA, including rare-earth refineries, magnet factories, and separation facilities.
He’s also reviewing proposals from private sector players eager to move quickly—especially given the precarious state of current U.S. inventories.
According to one internal briefing reviewed by officials, the Department of Defense’s current stockpile of processed rare-earths would not last more than a few months in the event of a full-scale export halt from China.
Contradictions Within Trump’s Broader Economic Policy
While the push for mineral independence gains traction, it’s running up against conflicting priorities. A sweeping new tax bill backed by the Trump campaign could undercut the very incentives needed to build out this sector.
Known informally as the “One Big Beautiful Bill,” the legislation seeks to repeal several green energy subsidies, including the 45X tax credit that currently supports U.S.-based critical mineral producers. Industry advocates have warned that rolling back these credits would make it harder to attract private investment—particularly in a sector where upfront capital costs are steep and long-term returns uncertain.
“This is a once-in-a-generation opportunity,” said a Washington-based lobbyist for one mining consortium. “But if the tax credit disappears, a lot of these projects will, too.”
Global Partnerships and Tech Innovation in the Background
Even as the U.S. ramps up domestic production, officials acknowledge that total independence from China isn’t realistic in the short term. As a result, discussions are underway with Australia, Canada, and other allies to build a network of secure suppliers.
In parallel, manufacturers are working to reduce their reliance on rare-earths altogether. Several European automakers—including BMW and Renault—have begun shifting toward magnet-free motor designs, while some U.S. startups are exploring novel alternatives using recycled materials or synthetic substitutes.
Still, such transitions take time. For now, the U.S. remains deeply dependent on Chinese processing plants, and the clock is ticking.
The Path Forward: Federal Action Pending
While no formal announcement has been made, several officials indicated that a DPA directive could come before the end of the month—particularly if Chinese authorities further tighten export flows.
The measure would signal a rare bipartisan consensus in Washington: that securing access to the building blocks of modern technology is not just an economic issue, but a strategic imperative.
“Supply chains are no longer just about efficiency,” said one senior defense official. “They’re about resilience. And right now, we’re anything but resilient.”
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