From the smartphone in your pocket to the car you drive, and from cutting-edge military aircraft to transoceanic communications cables, 17 chemically similar metals collectively labeled rare earth elements power nearly every corner of modern life. Coined in 1794, the term “rare earths” is actually a misnomer: for example, cerium, one of the most widely used members of the group, is just as abundant in the Earth’s crust as copper. What makes these metals rare and strategically critical is not their presence in the ground, but the extraordinary difficulty of separating them from raw ore and refining them into usable materials. This processing challenge has turned control of rare earth supply chains into a major source of geopolitical power, and today, that power is concentrated largely in China.
As a former war game adjudicator for the U.S. Navy, I have seen firsthand how hidden structural constraints can derail even the most carefully crafted strategic plans. Rare earth processing is one such underrecognized constraint that shapes the entire U.S.-China geopolitical relationship. Even critical U.S. military assets, from F-35 fighter jets to Virginia-class submarines, depend on rare earths processed in China. In 2025, China demonstrated the weight of this influence when it implemented sweeping new rare earth export controls, before agreeing to suspend the majority of these measures until November 10, 2026. This temporary suspension itself has become a powerful bargaining chip: the ability to extend the pause or allow restrictions to snap back into effect gives Beijing substantial diplomatic leverage, fitting Theodore Roosevelt’s famous description of geopolitical strategy as “speaking softly and carrying a big stick.”
### How China claimed global rare earth dominance
It was not inevitable that China would come to control the global rare earth market. As recently as the late 1980s, the U.S. led global production out of California’s Mountain Pass mine. But repeated incidents of radioactive wastewater leaking from the mine’s facilities into the Mojave Desert created regulatory and public pressure that made sustained domestic production difficult. When China expanded its own rare earth mining operations and began selling processed materials at lower prices, shifting suppliers became an economically straightforward choice for international buyers. Mountain Pass’s separation plant shut down in 1998, and mining operations ceased entirely in 2002.
While MP Materials restarted mining at Mountain Pass in 2017, amid growing U.S. concerns over rare earth supply security, the U.S. still imported more than two-thirds of its rare earth elements as of 2025. Current data underscores the scale of China’s dominance: in 2024, China mined 60% of the rare earth elements used in global magnet production, and handled 91% of all global rare earth separation and refining. For decades, international buyers accepted this arrangement: Chinese processed rare earths cost less than building domestic capacity, and buyers avoided the environmental costs and public backlash that come with refining. But in exchange for lower short-term costs, they ceded critical strategic leverage to Beijing – a dynamic that was less concerning when China was still seen as a rising, largely cooperative economic power.
### Why the U.S. domestic supply chain rebuild is moving slowly
The U.S. Government Accountability Office estimated back in 2010 that rebuilding a full end-to-end domestic rare earth supply chain, from mining to separation to finished magnet manufacturing, could take up to 15 years, and progress has been even slower than projected for three core reasons.
First, China has built its industry over decades with a workforce of thousands of specialized, experienced engineers, while the U.S. retains a tiny fraction of that expertise. All modern cutting-edge industrial rare earth processing technology was developed in China, and Beijing banned exports of this separation technology in December 2023, cutting off a key path for U.S. capacity building. Second, while the U.S. holds substantial domestic rare earth deposits, permitting and developing new mining projects remains a slow, fraught process. Third, despite billions in federal investment, supply chain rebuilding faces persistent headwinds from Chinese export restrictions.
To date, the U.S. government has committed more than $7 billion since April 2025 to rebuilding domestic rare earth production capacity. In 2025, the Pentagon purchased $400 million in preferred stock from MP Materials, giving the U.S. government a 15% ownership stake in the company. MP Materials currently projects that its new commercial magnet plant will not begin equipment testing until 2028. In 2026, the U.S. Commerce Department signed a letter of intent to provide rare earth magnet maker USA Rare Earth with $277 million in direct funding and a $1.3 billion loan to develop new facilities in Texas and Oklahoma. Even with this support, however, Chinese trade barriers continue to slow progress.
### The November 10, 2026 expiration deadline
In October 2025, China’s Ministry of Commerce announced six broad export control measures for rare earths. One of the most far-reaching, Announcement No. 61, requires even third-country factories in Germany or Japan to obtain a Chinese export license to ship products that contain 0.1% or more Chinese-origin rare earths, or that were manufactured using Chinese rare earth processing technology.
Shortly after the announcement, then-President Donald Trump met with Chinese leader Xi Jinping, and Beijing agreed to suspend the six main export control measures until November 10, 2026. In exchange, Washington paused its controversial “affiliates rule,” which imposes restrictions on companies majority-owned by blacklisted Chinese firms, for a one-year period. Both sets of restrictions will automatically snap back into effect on November 10 unless both governments agree to extend the temporary truce.
It is important to note that not all Chinese export restrictions were suspended. Licensing requirements for exports of seven heavier rare earth elements, implemented in April 2025, remain in full force. The impact of these controls on U.S. industry was already visible in 2025, when automaker Ford was forced to idle its Chicago assembly plant for a full week due to a shortage of rare earth magnets critical for vehicle speakers and electric motors. Ford CEO Jim Farley later described the company’s rare earth supply as “day to day,” noting the firm had no alternative domestic source, and production only resumed after Beijing granted a special export approval.
In June 2026, Beijing expanded restrictions further by adding 10 U.S. companies to its export control list, banning both Chinese and foreign firms from selling any dual-use (civilian and military) goods to the targeted firms. Notably, two of the blacklisted companies are MP Materials and USA Rare Earth – the two federally backed U.S. firms that have made the farthest progress in building a full domestic mine-to-magnet supply chain. Beijing framed the move as a reciprocal response to a similar blacklisting action by the U.S. Pentagon, but a clear strategic logic is at play: targeting the two leading U.S. rare earth developers slows America’s efforts to reduce dependence on Chinese processing.
If the truce is extended on November 10, the temporary pause on the six main export controls will remain in place, but the heavy rare earth licensing requirements and the June 2026 blacklisting of U.S. rare earth firms will stay in effect. This truce allows both sides to maintain a facade of cooperation, but it does not resolve the underlying strategic competition.
### Three possible paths forward for the U.S.
The U.S. currently faces three clear strategic options for managing its rare earth dependency, each with distinct tradeoffs:
First, the U.S. could choose to leave the majority of rare earth processing in Chinese hands. This is the fastest and lowest-cost option in the short term, but it leaves the U.S. permanently exposed to sudden supply disruptions and ongoing Chinese geopolitical leverage across a wide range of diplomatic and military issues.
Second, the U.S. could accelerate efforts to rebuild a full end-to-end domestic rare earth supply chain. This would eliminate most U.S. dependence on Chinese processing and the associated geopolitical leverage, but it will take more time to complete, require billions more in upfront investment, and force the U.S. to confront the environmental challenges of rare earth refining, which produces acidic and sometimes radioactive processing residues.
Third, the U.S. could build a collaborative allied supply chain with partner nations such as Australia and Japan, both of which have already begun developing their own rare earth processing capacity. This approach would reduce the risk of unilateral Chinese supply cuts, and Japan has already seen limited success with this model. However, it remains vulnerable to China’s existing rules that restrict the use of Chinese rare earth technology in third countries.
The outcome of the upcoming meeting between President Xi Jinping and President Trump on September 24, 2026, will likely shape whether the temporary export control pause is extended past November 10. But regardless of the short-term outcome, the broader strategic competition over rare earth supply chain dominance – and the geopolitical leverage that comes with it – will continue for the foreseeable future.
This article is based on analysis by Charles Edward Gehrke, Sloan Fellow at the Massachusetts Institute of Technology.