By: Matthew Dymowski
China dominates the global rare earth mineral market. Rare earth minerals, which contain rare earth elements (REEs), are essential in developing modern technology for both civilian and military use. The United States has long relied on China for these REEs. This dependence has now left the United States in a vulnerable position as China continues to limit its exportation of these vital minerals.
On April 4, 2025, Chinese officials announced new restrictions on REE exports. Their cited motivation was one of prevention and national security, given the military implications associated with the United States’ use of REEs. No matter the reason, the result is China gaining significant geopolitical leverage. Technology leads all facets of modern American life, notably including military capability. The question is: How did the United States—a nation defined by technological development and resource control—get outplayed at its favorite game?
At the core of this issue is the contrasting nature of the two players involved. The United States’ government is decentralized, while the Chinese government is centralized. This disparity lends itself to key differences in the legal frameworks seen in each nation. The United States has strict and multilayered regulation, as seen in laws such as the National Environmental Policy Act. With this regulation comes an almost endless number of speed bumps for activities such as mining. Unlike the United States, China’s relevant regulation—the Mineral Resources Law—gives the Chinese state full and uncontested control over mining. This one difference has allowed China to build up its REE cultivation and infrastructure at a rate impossible to match with the United States’ decentralized structure. This, in turn, has drastically affected the global trade market and national security.
The United States initially commanded the REE market in the 1980s, with the Mountain Pass Mine, located in California, being the top REE-producing mine globally. This dominance took place on a very different playing field, however, with global REE production being largely uncompetitive. Leading into the 1990s, China recognized the strategic value of REEs and went all in on mining. Given its centralized authority, the Chinese state moved without any questioning or roadblocks. Meanwhile, in the face of an expanding REE market, U.S. policymakers understandably faced environmental concerns. The U.S. began to rely more on imports and trade efficiency as domestic mining stagnated. By the late 1990s, China’s decision to focus on mining made it the frontrunner in the REE race. This production, in combination with the infrastructure built up around REEs, gave China near-complete control over the REE market.
By the late 2000s, the United States was fully reliant on imports to meet its REE needs. Congress first publicly recognized the United States’ vulnerable position in its 2010 report. The policy proposals provided in the report recognized the slow and treacherous route that is domestic mining. Because of this, many of the proposals seen therein instead focused on furthering trade development.
By 2022, China controlled almost 90 percent of global REE production and processing. Meanwhile, the United States’ REE supply was over 80 percent reliant on offshore imports. Recognized vulnerability has now lent itself to organized panic. In the same year, the Department of Energy launched a $32 million program to research an alternative method of producing REEs from domestic coal waste and by-products. In 2023, an additional $30 million of funding was put toward this alternative approach. Again in 2024, the United States tripled down on this coal-centric project, and by this time the U.S. relied on exports for more than 95 percent of its REE supply. Now, in 2025, the United States has shifted focus back toward trade, specifically relying on allied nations such as Australia, as seen in the October agreement.
The domestic mining concerns that have long been avoided were finally discussed on March 12, 2025, during the Senate Energy and Natural Resources Committee hearing. Some proposals from this hearing include shortening environmental activity review processes and updating the permit system for mineral exploration and extraction. While this area is notably contentious and slow-moving, these discussions highlight a true recognition of the possible consequences of the situation. This hearing also hosted the beginning of new legislative compromise as environmental concerns clashed with national security interests. It is this balancing that forms the foundation of the American REE dilemma.
The REE market is not a battle of resources but a battle of action. The United States’ legislative structure, which wisely slows government action, has long been its strength. However, the REE situation has shown unavoidable drawbacks. If significant action is not taken immediately, China will continue to weave its REE leverage into global trade and raise additional national security concerns. The U.S. appears to have three options regarding its REE needs. The first option is leaning even more into allied trade, which seems unwise given that the United States’ current REE supply needs cannot be met by any or even all its allies without the help of China. The second option is accelerating the domestic mining efforts previously discussed. The third option is exploring alternative methods of producing REEs. This can be done by investing more into the coal-based projects put in motion in 2022 or by investing in other exploratory methods. Whatever the case, this is no doubt a turning point on the global stage, and any inaction will have dire consequences.
