Filenews 17 October 2025
By David Blackmon
The U.S. may face the most severe energy crisis in decades due to its long-term dependence on rare earth imports. China's export restriction on such minerals announced last week potentially puts the U.S. and the global community ahead of the first global energy crisis since the Arab oil embargo caused crude prices to soar.
The Chinese Ministry of Commerce announced on October 9 the imposition of strict restrictions, effective from December 1, on any country wishing to export rare earth minerals mined or processed in China. Citing that these materials have been exported from third countries to others to be used in military applications, Beijing cited national security reasons to justify its move.
"China, as a responsible major country, implements export controls on related items in accordance with the law, in order to better defend world peace and regional stability and fulfil its obligations on non-proliferation of weapons, etc.," said a ministry spokesman.
Commenting on Beijing's decision, he added: "China stands ready to cooperate with the global community and exchange views on export control in order to better protect the security and stability of the global industrial and supply chain."
Reactions in the US
The reactions in the US were immediate and intense. All U.S. stock market indices — trading in positive territory in early trading on Friday — went into the red, with the Nasdaq plummeting more than 800 points at the end of the session.
Donald Trump responded to China's restrictive move with a post on Truth Social, noting that "some very strange things are happening in China." Shortly thereafter, it announced additional tariffs on Chinese imports. "Based on the fact that China has taken this unprecedented position, and speaking only of the US and not other countries that were similarly threatened, as of November 1, 2025 (or earlier, depending on any further actions or changes made by China), the US will impose on China an additional 100% tariff compared to those currently in force," Wrote.
Trump returned to Truth Social on Sunday, October 12, in an attempt to calm spirits. "Don't worry about China," he wrote, "everything will be fine! The respectable President Xi just had a bad time. He doesn't want his country's economy to go into recession, and neither do I. The U.S. wants to help China, not harm it!!"
Trump's calmer tone may have been due to the ceasefire agreement between Israel and Hamas. On Monday, the Dow rose more than 400 points. However, whether "everything will be fine" in terms of global supply and demand for rare earths remains to be answered.
China's Rare Earth Restriction Measures
An impending crisis has been brewing for a long time. China's announcement in October was just the latest in a series of moves made over the past year to curb exports and global trade in rare earths.
On October 1, 2024, Beijing imposed restrictions on non-Chinese companies trying to purchase rare earths mined and/or processed in China. The restrictions mainly affected semiconductor manufacturers, but they also had an impact on other industries.
In December 2024, Xi's government banned exports of germanium, gallium and antimony to the United States. The ban, presented as a countermeasure to U.S. export controls on advanced chips and technology, forced major U.S. defense contractors to look for alternative sources of supply. This exposed the weakness of the US military in terms of procurement procedures. The restrictions have sent shockwaves to global markets, causing prices to rise.
The next escalation by Beijing came in April 2025, when the government imposed broader controls on exports of seven rare earths: samarium, gadolinium, terbium, dysprosium, lutetium, scandium and yttrium, as well as magnets produced from them and used in fighter jets, wind turbines and electric motors.
All of China's moves provoked retaliation from the US government, both under Biden's presidency and under Trump. The Xi administration's announcement last Thursday and Trump's response are the latest moves in a geostrategic game of chess that has been played for a year, bringing the world to the brink of a major energy crisis.
Rare earths are indeed not rare
One of the myths about rare earths is that they are... Rare. It is not. Many countries, including the US, have large reserves waiting to be mined. The licensing process for new mines in the U.S. often takes more than a decade. The permitting process could be speeded up by a presidential decree of a national energy emergency, a move Trump has repeatedly mentioned.
Even if the process were to be accelerated, the new mines would have to operate for years before they could start production, and this under ideal conditions. Therefore, increasing domestic production to meet US needs cannot be achieved in a few weeks or months. In a world where China produces two-thirds of the world's supply and controls over 80% of production capacity, this is a national security issue that could remain unresolved for many years.
An issue, of course, that did not arise suddenly, but has been building for decades. As the CEO of the Almonty tungsten mining company, Lewis Black, said in October 2021, Western states countries consciously decided to withdraw from the hard rock mining sector in response to the environmental movement of the 1970s, deliberately ceding the scope of action to China and other developing countries. At the time, the Carter and Reagan administrations saw it as a "marriage of interest" that would allow these developed countries to continue to purify their air and water, simply transferring the environmental impact associated with mining, processing, and refining to China, where it would be out of sight and, Probably, from the minds of the American people. But the door of the USA.
Where does the geopolitical game go from now on?
Biden appeared to acknowledge the problem when, in June 2021, Trump said in a speech that he would commit his administration to a "holistic" approach to free the US from its dependence on supply chains dominated by China. Biden's commitment was not followed by any notable action, and the issue was left to be addressed by future administrations.
Since taking office in January, Trump, realizing that Congress will hardly act effectively, has emphasized executive action to simplify federal permitting procedures for energy projects. The effort is being led by Trump's newly formed Energy Sovereignty Council, chaired by Secretary of the Interior Doug Burgum, which includes Energy Secretary Chris Wright, Secretary of Transportation Sean Duffy and Environmental Protection Agency Administrator Lee Zeldin, among others
The Pentagon has struck a series of deals in recent months to buy shares in rare earth mining and processing companies. The start was made with MP Materials - based in California - in July. MP Materials is currently the largest rare earth processor in the U.S. and will look to double its production capacity as part of the government's investment that bought a 15% stake.
The Trump administration has also reportedly begun negotiations to invest in the Tanbreez mining company, off the coast of Greenland. In addition, Reuters reported in August that the Trump administration is considering redistributing $2 billion. of CHIPS funds in additional investments for critical U.S. energy needs.
Regardless of how the Trump-Xi meeting unfolds in a few weeks, it is obvious that the US energy dependence on China is not sustainable. It will take many more strategic moves by Washington and U.S. industry to fully free the U.S. from China's dominance over all areas of rare earths. The Xi government is aware of this reality and has a long history of taking aggressive measures to protect its sovereignty. Therefore, "geopolitical chess" is bound to continue—and possibly escalate—in the months and years to come.
