MP Materials halts rare earth shipments to China amid trade tensions

In the United States, MP Materials, the owner of the only rare earths mine, announced that it would cease sending shipments of rare earth concentrate to China. This decision was made against the backdrop of ongoing trade tensions and tariffs imposed by the Chinese government on U.S. imports. The company, which invested nearly $1 billion to restore the rare earth supply chain in the U.S., stated that over 70% of its revenue comes from rare earths, nearly half of which is refined in California and sold to markets outside of China, including the domestic U.S. market. The decision comes after President Donald Trump ordered a probe into the potential for new tariffs on critical mineral imports. MP Materials has been preparing for such a scenario, arguing that selling under a 125% tariff is not commercially viable and does not serve the national interest of the U.S. Their efforts to revitalize domestic supply chains illustrate a long-term vision aimed at navigating trade dislocation while strengthening the country’s industrial base. However, the trade relations with China remain delicate. Experts warn that if China continues to impose export limits, there could be significant implications for the U.S. economy, leading to potential shortages of critical rare earth elements. The California mine, inherited by MP Materials in 2017, currently can't meet all of America's demands for rare earths, contributing to a push for new mines across the country. While many U.S. manufacturers currently rely on these elements for production—adaptive pressures are mounting. The expected supply constraints have already resulted in price spikes for some rare earth materials, notably terbium. Major companies in the automotive and defense sectors are under scrutiny, as they are profoundly affected by these developments. Though manufacturers may initially absorb higher costs, the sustainability of that approach hinges on the evolving trade landscape and the consistent availability of rare earths from both domestic and foreign sources.