A looming deadline to cut off Chinese rare earths could backfire, as US miners and processors admit they can’t keep up.

Washington wants American defense contractors and manufacturers off Chinese critical minerals by January 2027. New reporting suggests that goal is running into a hard wall: the US mining industry simply isn’t there yet.

Key Details

Trump has pushed billions into nearly 150 minerals companies since taking office, aiming to break China’s grip on rare earths, magnets, tungsten, molybdenum and tantalum. A federal deadline set for January 1, 2027 would block purchases of these materials from China, Russia, Iran and North Korea.

The gap is massive. In 2025, US demand for the most common rare earth magnet hit roughly 48,000 metric tons – domestic supply covered just 300 tons. By year’s end, US capacity is expected to reach only 5,000 tons. Tungsten hasn’t been produced domestically since 2015, tantalum since 1959.

Sixteen industry executives, analysts and policymakers interviewed by Reuters agree: the infrastructure needed to hit the deadline is years away.

Market Reaction

Defense stocks and rare earth miners remain sensitive to every policy shift here. Names like MP Materials, Energy Fuels and Ucore Rare Metals are drawing fresh attention as Pentagon funding flows in, while defense giants reliant on Chinese supply face pressure over compliance costs.

China still controls over 80% of global mineral refining. The IEA warns $6.5 trillion in manufacturing could be at risk if Beijing tightens export controls. For traders, this is a slow-burning supply chain story with real volatility potential attached to any waiver announcement or Chinese trade response.

What to Watch

Watch for further waiver decisions, Pentagon stockpiling moves under Project Vault, and progress updates from MP Materials, Energy Fuels, and ReElement Technologies as 2027 approaches.

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Source: REUTERS