Trump Administration Seeks to Boost US Rare Earth Supply Chain

The Trump administration is considering invoking the Defense Production Act (DPA) to provide financing, loans, and other support for rare earth-related initiatives, including mining, processing, and downstream technologies, aiming to strengthen the US domestic supply chain. However, a detailed plan and timeline have not yet been finalized.

MP Materials, the only domestic rare earth producer, is expected to be a key beneficiary. Deputy Defense Secretary Steve Feinberg is actively working to secure funding for the company, which has already received millions from the Department of Defense. MP Materials’ stock rose 17% to US$29.96 in New York trading, its highest intraday level since mid-March.

The United States lacks large-scale mine-to-magnet capabilities, and using emergency powers under the DPA would enable the Defense Department and other agencies to accelerate sourcing efforts, which lag far behind China’s dominance. The urgency intensified after Beijing used its rare earth capacity as leverage in recent trade negotiations with Washington.

“This is a wake-up call for America,” says Interior Secretary Doug Burgum. “We are currently very vulnerable to China’s control not just of mining but especially of processing. Although they mine globally, they control 85% of refining.” Burgum adds that the US stockpile of rare earths is “massively insufficient,” and billions of dollars may be required to build a larger mineral reserve.

These discussions follow President Trump’s executive order from over two months ago, which aims to boost critical mineral production by expediting permitting for mining and processing projects. While that order included rare earths, one source said a new directive would allow Trump to publicly demonstrate efforts to counter China on a strategic vulnerability that has fueled trade tensions between the economies.