On June 22, China added MP Materials Corp. and USA Rare Earth Inc. to its export control list, targeting key US firms backed by hundreds of millions in federal funding aimed at reducing reliance on Chinese rare earths.
China, controlling 60% of global rare earth mining, also dominates refining processes. The move effectively hampers US efforts to develop an alternative supply chain.
Both companies depend on Chinese materials and technology. By restricting exports, China signals that US competition won’t receive assistance from its resources.
The rare earth trade conflict began escalating in 2025 with licensing requirements, expanding to cover processing equipment and significantly impacting imports of critical materials.
Rare earths are essential for electric vehicles, defense systems, and manufacturing. Disruptions pose risks to national security, particularly for the Pentagon, which has relied on these firms for defense materials. As demand for electric vehicles rises, supply challenges could lead to increased costs and delays in production.