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Electric vehicles

Trump Administration Intensifies Efforts to Diversify Domestic Critical Minerals Industry

Strategic Insights

— 2 min read

The Trump administration is launching a campaign to reduce the country's reliance on foreign-made critical minerals, a move that could benefit the production of electric vehicles, smartphones, and fighter jets. The effort involves investing hundreds of millions of dollars in American companies, setting a minimum price for U.S.-produced critical minerals, and launching an investigation into foreign-made supplies. Industry insiders and lawmakers have warned for years that the United States' reliance on hostile foreign powers for certain rare-earth elements poses a significant national and economic security threat.

Key Takeaways:

  • The Trump administration has invested hundreds of millions of dollars in American companies to develop the domestic critical minerals industry.
  • The federal government has made an agreement with MP Materials to ensure the purchase of every magnet made at its new plant and set a minimum price for its neodymium and praseodymium products for a decade.
  • The Pentagon has launched an investigation into foreign-made supplies and has promised to ensure every magnet made at the MP Materials plant is bought.
  • American companies like NioCorp and USA Rare Earth are ramping up production to meet the growing demand for rare-earth magnets, with USA Rare Earth planning to start making about 600 tons of magnets next year.
  • Despite new production aiming to come online in the next few years, American companies are still nowhere near being able to satisfy North America's demand for roughly 35,000 tons of magnets a year.
  • The demand for magnets could double in the next decade, according to analysts at Benchmark Mineral Intelligence.
  • The government can provide incentives to stop American buyers from falling back on cheap Chinese products once they are widely available again, said Joshua Ballard, CEO of USA Rare Earth.
  • The Pentagon has awarded over $439 million to establish supply chains for domestic rare earths between 2020 and 2024.
  • The Trump administration has also tried to secure access to critical minerals outside of the U.S., including from the Democratic Republic of Congo and Rwanda.
  • Derek Scissors, senior fellow at the American Enterprise Institute, expressed concerns that Trump could consider it a success if China agrees to guarantee rare-earth supplies in trade talks.
  • David Abraham, a rare-metals expert, said new U.S. mines are years away, and everyone agrees that the U.S. still needs to work out a deal with China to guarantee rare-earth supplies.

Statistics:

  • Over $2 billion has been allocated in 2025 for the Pentagon to boost the U.S. stockpile of critical minerals.
  • An additional $5 billion is being invested through 2029 to invest in supply chains.
  • The Pentagon has awarded over $439 million to establish supply chains for domestic rare earths between 2020 and 2024.
  • The demand for magnets could double in the next decade, according to analysts at Benchmark Mineral Intelligence.
  • The U.S. relies on foreign-made critical minerals, including rare-earth elements, which pose a significant national and economic security threat.
  • USA Rare Earth plans to start making about 600 tons of magnets next year.
  • Noveon Magnetics, America's only factory currently making rare-earth magnets, is ramping up production to make 2,000 tons of magnets a year.

Sources:

  • AP News (n.d.)
  • White House Executive Order (March 2023)
  • Center for Strategic and International Studies (n.d.)
  • Benchmark Mineral Intelligence (n.d.)
  • USA Rare Earth (n.d.)
  • MP Materials (n.d.)
  • NioCorp (n.d.)
  • American Enterprise Institute (n.d.)
  • David Abraham (author, "The Elements of Power")
  • Tang (author, AP News)
  • The Associated Press (2025)

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