A bipartisan group of lawmakers has proposed creating a new $2.5 billion agency to boost production of rare earths and the other , while the Trump administration has already taken aggressive steps to end China’s dominance in the market for these materials—vital for high-tech products like cellphones, electric vehicles, jet fighters and missiles.
It’s premature to know how the bill, if enacted, would mesh with White House policy, but regardless of the approach, the U.S. urgently needs to cut back sharply on its reliance on China. This follows Beijing leveraging its control of the critical minerals market to gain an upper hand in the trade war with Washington. In October, President Donald Trump and Chinese President Xi Jinping agreed to a one-year truce under which Beijing would continue exporting critical minerals, and the U.S. would relax export controls on American technology to China.
The Pentagon has nearly $5 billion over the past year to help secure its access to these materials, as the trade war revealed how dependent the U.S. is on China—which processes more than 90% of the world’s critical minerals. To end Beijing’s stranglehold, the U.S. government is in a handful of critical mineral companies and, in some cases, backstopping the prices of certain commodities using an approach that looks more like it’s from China’s playbook than a Republican administration’s.
The bill unveiled Thursday by Sen. Jeanne Shaheen (D-N.H.) and Sen. Todd Young (R-Ind.) would take a more market-driven approach by establishing an independent agency tasked with creating a stockpile of critical minerals and related products, stabilizing prices, and promoting domestic and allied production to ensure a steady supply not just for the military but also for the broader economy and manufacturers.
Shaheen described the bill as “a historic investment” to enhance U.S. economic resilience against China’s dominance, which she said has made the U.S. susceptible to economic coercion. Young stated that establishing the new reserve is “a much-needed, aggressive step to protect our national and economic security.”
New sense of urgency
When Trump implemented broad tariffs last spring, Beijing responded not just with reciprocal tariffs but also strict export limits on critical minerals—prompting Washington to concede and ultimately agree to the ceasefire when the leaders met in South Korea.
On Monday, during his address at , Defense Secretary Pete Hegseth disclosed that the Pentagon has, just in the past five months, “deployed over $4.5 billion in capital commitments” to finalize six critical minerals deals that will “help free the United States from market manipulation.”
One of these deals includes a $150 million preferred equity investment from the Pentagon in Atlantic Alumina Co. to preserve the nation’s only remaining alumina refinery and construct the first large-scale gallium production facility in Louisiana.
Last year, the Pentagon announced it would in MP Materials—which operates the nation’s sole active rare earths mine at Mountain Pass, California—and formed a $1.4 billion joint venture with ReElement Technologies Corp. to build up a domestic supply chain for rare earth magnets.
The U.S. government’s bold step to acquire equity positions has led some analysts to note that Washington is shifting toward a form of state capitalism to compete with Beijing.
“While there are risks of political interference, the strategic rationale is compelling,” wrote Elly Rostoum, a senior fellow at the Washington-based research institute Center for European Policy Analysis. She suggested that the new model could be “a prudent way for the U.S. to ensure strategic autonomy and industrial sovereignty.”
But industry-wide, companies are embracing the involvement of the Trump administration.
“He’s thinking strategically about critical minerals unlike any prior president. And it’s long overdue, considering the military and strategic risks we face from relying on imports of so many essential components of technology and national defense,” said Jim Sims, chief communications officer at NioCorp. The company is working to complete its fundraising to develop a mine in southeast Nebraska.
Relying on allies for help
Beyond efforts to increase domestic production, the Trump administration has worked to obtain some of these vital materials from allies. In October, Trump signed an to invest in mining there, and the president is now actively trying to in the from there.
On Monday, G7 finance ministers met in Washington to discuss their exposure to risks in critical mineral supply chains.
U.S. Treasury Secretary Scott Bessent—who has overseen multiple rounds of trade negotiations with Beijing—called on attendees to enhance their supply chain resilience and expressed gratitude for their commitment to collaborating “toward decisive action and lasting solutions,” according to a Treasury statement.
The bill introduced Thursday by Shaheen and Young would promote production among both domestic and allied producers.
Past efforts to bolster rare earths production
Over the past few years, Congress has advocated for legislation to shield the U.S. military and civilian industry from Beijing’s stranglehold. The issue rose to the top of the agenda whenever China used its tried-and-true strategies: either limiting supply or dumping excess critical minerals on the market to lower prices and push potential competitors out of business.
The Biden administration tried to boost domestic demand for critical minerals through efforts to expand electric vehicle and wind turbine manufacturing. However, the Trump administration largely removed incentives for those products and opted instead to focus on directly increasing critical minerals production.
Most earlier efforts were far more modest in scope compared to the past year’s government actions, and they were largely set aside once China softened its stance and relaxed access to critical minerals.
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Funk reported from Omaha, Nebraska. AP writer Konstantin Toropin also contributed to this report.