China has established itself as a rare-earth leader with a near monopoly. President Trump has taken numerous steps to breakChina’s grip, including arare-earth dealwith Kazakhstan and increasedinvestment in Canadato strengthen U.S.independence. Now, U.S. interventions under Trump in Latin America are also reducing China’s access to rare earths, extending the competition into the Western Hemisphere.
China controls approximately70% of rare-earthmining and 90% of refining. Tim Johnson, a technical advisor to REalloys (NASDAQ: $ALOY) and a ten-year veteran in the field of rare earth minerals, told The Gateway Pundit, “100% of all production today relies on some Chinese nexus, whether or not that’s technology, procurement of equipment, supplies, or reagents.”
China did not always hold this position. After U.S. prospectors discovered rare earths at Mountain Pass, California, in 1949, China sent delegations to study the technology in the 1980s and 1990s, replicated and improved it using cheap electricity, and built a domestic industry that was both lucrative and environmentally destructive. Chinese state media compared the industry at its worst to drug trafficking.
Beijing imposed export quotas in the 1990s and launched what it internally called a “secret war” of consolidation starting in 2011, reducing hundreds of firms to sixstate-backed giants. After losing a WTO challenge in 2014, China shifted from controlling output volume to controlling which firms could operate, creating a more durable form of dominance. Today, Chinese state-backed monopolies control roughly 89% of global refining and nearly every stage of the high-performance magnet supply chain.
China escalated further in April 2025 when the Ministry of Commerce imposed national-security-based export licenseson seven elements, including dysprosium and terbium. Export volumes fell sharply, forcing U.S. and European manufacturers to cut production. Pricesin Europe roseto as much as six times those inside China.
On October 9, 2025, Beijing expandedcontrols acrossthe entire supply chain, applyingextraterritorial rulesto transactions between third countries and restricting exports to companies linked to foreign militaries. Beginning December 1, 2025, military-related applications wereeffectively cut off.
The defense implications are significant. Heavy rare earths such as dysprosium and terbium are essential for precision-guided munitions, hypersonic weapons, and advanced aircraft systems. Gadolinium and terbium are used in stealth coatings on platforms including the F-35 and B-21 Raider. These materials also play a critical role in submarine sonar systems and nuclear propulsion.
The Trump administration has moved on multiple fronts to break that grip by securing supply agreements with Kazakhstan and Canada, investing in domestic production, and locking in Latin American supply chains. The most significant recent step is thenearly $3 billionacquisition by Trump administration-backed USA Rare Earth of Brazil’s Serra Verde Group, owner of the Pela Ema mine and processing plant.
Serra Verde is theonly large-scale producerof the four key magnetic rare earths, neodymium, praseodymium, dysprosium, and terbium, outside of Asia, and its output is expected to represent more than half of all non-China heavy rare earth supply by 2027. The deal is backed by$565 millionin U.S. International Development Finance Corporation financing and includes a 15-year output agreement, positioning the combined entity to generate between $550 million and $650 million in EBITDA by the end of 2027.
Serra Verde has reduced China’s access byrenegotiating its offtakeagreements so they expire at the end of 2026, with future contracts expected to shift to processors in the United States, Australia, Estonia, France, and Malaysia.
Source: The Gateway Pundit
