Highlights

• China dominates rare earth processing, with over 90% of heavy earths and 80% of light rare earths being processed domestically.
• The U.S. faces critical midstream and downstream challenges in rare earth production, including limited separation and magnet manufacturing capabilities.
• Current policy discussions must move beyond geopolitical headlines to develop a full-spectrum, secure rare earth supply chain strategy.

A recent interview on Bloomberg Businessweek (opens in a new tab) featuring Gracelin Baskaran (opens in a new tab), Director of the Critical Minerals Security Program at Center for Strategic & International Studies (opens in a new tab) (CSIS), and metals reporter Joe Deaux (opens in a new tab) offers a timely overview of the geopolitical and economic stakes surrounding China's new export controls on seven rare earth elements. While the discussion successfully clarifies the significance of non-automatic licensing—China's current lever in the U.S.-China trade standoff—it stops short of probing deeper structural problems plaguing Western rare earth resilience, especially in the midstream and downstream sectors.

The interview rightly underscores China's overwhelming dominance in rare earth separation, with more than 90% of heavy rare earths and 80% of light rare earths processed domestically. It also highlights the critical role rare earths play in defense, energy, and high-tech manufacturing, from missiles and fighter jets to EV motors and wind turbines. The export restriction, as Baskaran notes, is a calibrated diplomatic signal, not an outright ban—yet its economic and strategic consequences are immediate and potentially severe.

However, the conversation fails to fully interrogate the U.S. industrial and logistical bottlenecks beyond mining. The midstream challenge—building scalable, environmentally viable separation and refining facilities in the U.S.—is only mentioned in passing. Even more glaring is the lack of attention to downstream vulnerabilities: the U.S. still imports nearly all of its sintered rare earth permanent magnets, with no domestic capacity for high-volume manufacturing.

While MP Materials (opens in a new tab) is mentioned, the scale of its vertical integration efforts is overstated relative to national demand, and no mention is made of the slow progress in magnet production at General Atomics, Vacuumschmelze, or other DOD-backed efforts.  Note Rare Earth Exchanges has referred to MP Materials as a national treasure trove, given they represent the only operational rare earth mine in the USA—and the firm is making progress on the processing front, inking corporate supply deals. But they remain in the early stages, and that’s just the reality.  MP Materials still ships a substantial percentage of outtake to China for processing, although that contract should be terminated soon.

Rare Earth Exchanges calls for a more rigorous and comprehensive public discourse. Policy and media discussions must move beyond headline geopolitics and examine how the U.S. can realistically build a full-spectrum, secure rare earth supply chain—from ore to magnet—before China escalates further. Without such scrutiny, the U.S. remains dangerously exposed to supply disruptions and diplomatic leverage from Beijing.