Trump’s strategy to break China’s rare earth leverage

The Trump administraction’s strategy to break China’s rare earth leverage rests on five core pillars:

• public-private partnerships: the US government became the largest shareholder in MP Materials (investing US $400 million in convertible preferred stock in MP Materials, acquiring a roughly 15% diluted stake) in 2025, with more deals expected
• price floors / new pricing system: the US (and allies, such as Australia) are planning price floors and “forward-buying” to counter China’s use of below-cost exports to control global supply chains. For example, the equity stake agreement with MP Materials, backs an independent pricing mechanism and guaranteed a minimum price of US$110/kg for NdPr to support domestic projects, explicitly to counter Chinese undercutting
• strategic stockpiles: the US is preparing to purchase US$1 billion worth of critical minerals to build a national stockpile, prioritizing NdPr oxide, NdFeB magnet block, and Sm-Co alloy to potential FY2024–25 acquisitions
• permitting: Trump’s executive order to “Increase American Mineral Production“ is part of a trend across America at federal and state level to accelerate permitting processes for separation and magnet plants, pairing grants/loans with equity to de-risk timelines. So, for example, Ramaco Resources announced in July 2025, that its Brook Mine has secured a second five-year mining permit from Wyoming regulators, completing all required approvals — making it the first rare earth mine to open in the US in 70 years
• international deals: the Trump administration has agreed a series of partnerships across Japan, Malaysia and Australia to co-fund and build out mining, separation, metals, and magnet capacity in a pivot from China to other partners in Asia. For example, in Malaysia, Lynas — the largest non-Chinese supplier — will build a new US$142 heavy rare earth plant in the country, in partnership with South Korea. Processing will include samarium, gadolinium, dysprosium, terbium, yttrium, and lutetium, will follow within two years, while the production of additional HREs such as europium, holmium, ytterbium, and erbium will be considered subject to commercial returns

This is no longer a laissez-faire approach by the US state to support rare earth production, similar to what we’ve seen over the past decade despite repeated warnings, and instead it’s a wide-spread intervention to bridge the scale and cost challenges in taking on China.