As the Trump administration intensifies its efforts to reshape the global economic landscape through tariffs and the creation of alternative supply chains, a critical vulnerability within the U.S. defense industry is being starkly illuminated: its deep reliance on China for rare earth elements (REEs). The escalating trade friction between Washington and Beijing, amplified by the imposition of tariffs under successive U.S. administrations, has triggered a forceful response from China, exposing the precarious dependence of the U.S. and its Western allies on these vital materials.
This group of 17 obscure metallic elements forms the bedrock of numerous advanced military applications. From the guidance systems of bombs and missiles to the powerful magnets essential in precision-guided munitions and the engines of fighter jets, REEs are indispensable.
However, China’s dominant position in the mining, refining, and processing of these elements creates a significant choke point. Beijing’s near-monopoly leaves U.S. defense manufacturers of critical technologies like military radars, night-vision goggles, and thermal sensing devices acutely susceptible to disruptions in supply. One such example is the F-35 Lightning II combat aircraft, which according to the Department of Defense contains 900 pounds of REEs. Another involves submarines, some of which require over 9,200 pounds of these materials.
The recent tariff hikes on Chinese imports announced by President Trump, reaching a potential 145 percent, have been met with a calculated countermove from Beijing. The announcement that special export licenses will now be required for seven heavy rare earth metals – samarium, gadolinium, terbium, dysprosium, lutetium, scandium, and yttrium – sends a clear signal. These specific minerals, identified by NATO in December 2024 as crucial for combat aircraft, missiles, main battle tanks, and ammunition, underscore the direct threat to Western military capabilities.
The latest actions undertaken by Beijing build on earlier export bans to the U.S., including on December 3, 2024, when China announced an outright ban on the export of gallium, germanium, and antimony to the U.S. The measure – which directly targeted key minerals critical for production of military systems and semiconductors – came one day after the former Biden administration imposed tighter restrictions on Chinese access to advanced American technology.
While the latest step taken by China is not an outright ban, this licensing requirement will undoubtedly introduce uncertainty and limit the consistent flow of critical components to manufacturers. This action in an already volatile global marketplace echoes Beijing’s 2010 retaliation against Japan, highlighting the potential for the weaponization of crucial supply chain resources.
Alarmingly, this vulnerability was not immediately addressed. Despite the clear implications of China’s dominance, it was not until 2017, during President Trump’s first term, that initial executive action aimed at bolstering domestic REE production was taken. The Biden administration furthered these efforts by allocating more financial resources to the issue.
Upon his return to the White House, President Trump has ramped up efforts, pushing for U.S. access to REE deposits in Ukraine as compensation for past military and economic aid, even proposing “buying Greenland” for its critical mineral reserves. His recent executive order, signed on March 20, invoking the Defense Production Act to boost domestic mineral production and streamline permitting, underscores the gravity of the situation. The order explicitly notes the U.S.’s 100 percent import reliance on at least 15 critical minerals, with an alarming 70 percent of its rare earth imports originating from China.
The urgency of these executive initiatives is amplified by the stark reality of limited REE stockpiles within the Pentagon and the U.S. defense industry. Current reserves are likely measured in months, not years, leaving the nation dangerously exposed to prolonged disruptions.
The greater question is why it took officials in Washington so long to recognize this crucial strategic vulnerability, despite warnings raised by the U.S. Magnetic Materials Association of the threat of the nation’s economy and national security by dependence upon China for rare earths dating back to February 2010.
Regardless, after years of kicking the proverbial can down the road and maintaining a myopic single-point-of-failure reliance, policymakers are now looking for a pathway forward.
Reshoring and friend-shoring efforts to establish a secure and diversified REE supply chain are underway, but these initiatives are complex and time-consuming. Building the necessary mining, refining, and processing infrastructure from the ground up will take years, leaving the U.S. defense industry in a precarious position in the interim.
The escalating trade tensions and China’s retaliatory export controls serve as a stark reminder of the interconnectedness of the global economy and the strategic vulnerabilities that arise from concentrated supply chains. For the U.S. defense industry, the pressure to secure a reliable and independent source of rare earth elements is mounting, demanding swift and decisive action to mitigate the risks posed by geopolitical realities.
Dan Darling is Forecast International’s director of military and defense markets. In this role, Dan oversees a team of analysts tasked with covering everything from budgeting to weapons systems to defense electronics and military aerospace. Additionally, for over 17 years Dan has, at various times, authored the International Military Markets reports for Europe, Eurasia, the Middle East and the Asia-Pacific region.
Dan's work has been cited in Defense News, Real Clear Defense, Asian Military Review, Al Jazeera, and Financial Express, among others, and he has also contributed commentary to The Diplomat, The National Interest and World Politics Review. He has been quoted in Arabian Business, the Financial Times, Flight International, The New York Times, Bloomberg and National Defense Magazine.
In addition, Dan has made guest appearances on the online radio show Midrats and on The Media Line, as well as The Red Line Podcast, plus media appearances on France 24 and World Is One News (WION).
