10/14/2025, 7:03:59 PM | China | United States | Canada
Military & Defense
Washington is using investments, price supports and a proposed $5 billion fund to reduce Chinese control of rare earth supply chains.
The U.S. is accelerating government-led efforts to break global dependence on China for rare earth elements vital to defense and advanced electronics. These 17 elements power high-performance magnets used in precision-guided munitions, jet engines and sensors, and China’s dominance has created a strategic vulnerability. Washington is deploying public‑private partnerships, equity investments and guaranteed price supports to rebuild a resilient supply chain. A high-profile deal with MP Materials includes a $400 million equity stake, $150 million in debt and price floors intended to blunt Chinese market dumping. The government has also taken smaller stakes in projects such as Lithium Americas’ Thacker Pass and pursued interests in Greenland and Canadian deposits to diversify sources. Separately, a proposed $5 billion fund via the U.S. International Development Finance Corp., in partnership with Orion Resource Partners, aims to finance mining and processing for critical minerals that serve both national security and clean‑energy transitions. Policymakers frame the intervention as a necessary shift from free‑market orthodoxy to active industrial policy, prompted by supply shocks during COVID and strategic pressures from China and Russia’s war in Ukraine. Rapid implementation is now prioritized over further study.