Reports suggest that President Donald Trump's tariff war is pushing U.S. defense contractors and key industries into a rare earth supply chain crisis. As China has halted rare earth exports, the White House and industry have moved to implement emergency measures.
According to the Washington Post on the 24th (local time), China recently restricted its rare earth exports to the U.S. in response to the tariff policies of the Trump administration. Consequently, various departments, including the White House National Security Council, National Economic Council, Department of Commerce, Department of Energy, and Trade Representative’s Office have initiated emergency responses. The government is considering funding domestic rare earth production projects and expediting processing procedures, as well as entering trade negotiations to establish supply chains with regions outside of China.
Rare earth elements are 17 types of metals essential in military, technology, and other fields. According to an analysis by the Center for Strategic and International Studies (CSIS), the F-35, the U.S. military's main fighter jet, requires about 400 kg of rare earths. The Arleigh Burke-class destroyers use 2,200 kg, while the Virginia-class nuclear submarines contain 420 kg of rare earths.
However, the supply chain is effectively monopolized by China. Ashley Zumwalt-Forbes, a former deputy director of strategic minerals at the U.S. Department of Energy, noted to the Wall Street Journal that "it's natural for China to use this as a bargaining chip, and the Achilles' heel of the U.S. supply chain is precisely this point."
Since rare earth elements are widely used across various industries, including defense, their supply disruption can significantly impact the entire industry, posing great risks. Multiple officials, who requested anonymity, indicated that Trump's recent mention of the possibility of tariff reductions on China is also viewed in this context as sending a negotiation message to China.
Currently, most U.S. manufacturers rely on Chinese rare earths, leaving them with no clear alternatives if China restricts exports. Reports indicate that some companies are already relying on secured inventories, and methods to extract small amounts of rare earths from recyclable materials not included in the export restrictions are being attempted. Joy Oishel, a senior analyst at the U.S. Energy and Supply Chain Security Forum (SAFE), warned that "some companies have only 40 to 60 days' worth of inventory left, and if export approvals do not come through, there is a risk of production stoppage."
The U.S. holds some strategic stockpiled minerals, but these can only be used in national security crisis situations. Zumwalt-Forbes stated that "the U.S. government stockpiled $50 billion (approximately 71.7 trillion won) during the Cold War, but it has now reduced that to $800 million (approximately 1.15 trillion won)" and added, "The stockpiles were mostly disposed of in the 1990s and 2000s, leaving the U.S. in a very vulnerable position."
The vulnerability of the rare earth supply chain has been pointed out since the first term of the Trump administration. In the past, China restricted rare earth exports during a dispute with Japan in 2010, which had severe impacts on major industries such as the Japanese automotive sector.