Rare Earth Export Restrictions — One Year Later

Core Thesis

China's 2025 rare-earth/magnet export controls exposed deep US supply-chain vulnerabilities. A Trump–Xi deal suspended restrictions for one year (through ~Oct/Nov 2026), but the US still depends on Chinese processing; the question is whether industrial policy can build diversified ex-China chains before tensions re-escalate.

Timeline

• 2025-04-04: China restricts heavy REEs + permanent magnets.
• Jun 2025: auto-industry disruptions (US/EU/Japan).
• Oct 2025: China reimposes stricter controls + foreign direct product rules.
• Late Oct 2025: Trump–Xi agreement suspends restrictions for one year.

Key Numbers

• US produced 8,900 t REE compounds — ~1/3 of consumption; remaining 18,100 t imported (China 71%, Malaysia 13%, Japan 5%, Estonia 5%).
• US yttrium imports collapsed to 17 t (Apr–Dec 2025) vs 333 t pre-restriction; 20 t Feb 2026 vs 66 t Jan 2025.
• US committed >$7.3B across DOD, Commerce, Energy, DFC, EXIM.

Companies / Investments

• MP Materials: $400M DOD equity + $150M loan; 10X facility (Texas); $110/kg NdPr floor.
• Vulcan Elements: $620M DOD financing. USA Rare Earth: $1.6B CHIPS package.
• Lynas: Malaysia refining, $110/kg floor; first ex-China dysprosium (May 2025).
• Ucore ($18.4M DOD, Louisiana); HyProMag ($92M EXIM, recycling, Texas).
• Partners: Australia (Mount Weld), Saudi Arabia (Jabal Sayid, DOD 49% refinery equity), Japan, Brazil (Serra Verde).

Persistent Vulnerabilities

China still dominates processing/refining/downstream; HREE feedstock single points of failure; monthly supply volatility; commercial scalability of alt-processing uncertain.

Source: Rare Earth Export Restrictions: One Year Later — Baskaran & Schwartz, CSIS, 2026-04-27. Full-text fetched.