The world is changing rapidly, and at the same time, the relentless trade war between the US and China is raging. The focus is on rare earths, which are virtually indispensable in high-tech products - from submarines, AI chips, wind turbines, and electric motors to stealth bombers. A gold rush broke out in the industry in 2025, with companies such as Arafura, Lynas Rare Earths, MP Materials, and St George Mining taking center stage.
The object of desire does not shine yellow - it is invisibly embedded in our smartphones, powers the motors of electric cars, and is the backbone of modern weapon systems. We are talking about rare earths. The market for these 17 metals is small, with a volume of just a few billion US dollars. But it is expected to grow to US$8 billion by 2032. The superpowers have turned this small market into a geopolitical battlefield.
The trade war: USA vs. ChinaThe origins of the current conflict go back a long way. Under Barack Obama's presidency, the US began to shift its strategic focus away from Europe and toward the Pacific region, identifying China as its future main competitor for global dominance. This competition has since escalated into a full-blown trade war. Since Joe Biden took office, trade restrictions have been in place, and Donald Trump has at times sparked an economic war with tariffs. Under various US administrations, sanctions and tariffs have been massively expanded. High-performance chips, AI technologies, and complex machines - such as those from Dutch manufacturer ASML - can no longer be exported to China without further ado. China is responding to this technological isolation with its strongest weapon: dominance over the raw materials markets.
China's monopoly and the global mapChina is now the world's second-largest economy and the largest consumer of most raw materials. The country also controls around 60 percent of global production and as much as 90 percent of rare earth processing. China even has a monopoly on some rare earths. This quasi-monopoly enables Beijing to hit the West where it hurts. While the US ceased production decades ago due to environmental regulations and low world market prices, China has perfected the entire value chain - from mining to finished high-performance magnets. But China is not alone. Other countries are gaining importance in shifting the balance of power:
Australia: The most important player outside China, mainly through the company Lynas Rare Earths. US: With the Mountain Pass mine, they are attempting a comeback. Myanmar & Kazakhstan: Important countries when it comes to reserves, with Myanmar often acting as an extension of Chinese companies. Kazakhstan, on the other hand, is strongly focused on Russia. Brazil: Home to the world's second-largest reserves. China dominates the market for rare earths, both as a producer and in processing. In some cases, its share of individual rare earths is as high as 100%. Source: US Geological Survey (USGS), January 2025. See here: https://www.usgs.gov/centers/national-minerals-information-center/rare-earths-statistics-and-information. Without magnets, there would be little progress!There is great concern in the West, as rare earths are indispensable for key industries. China has already stopped deliveries in the past, forcing companies such as Ford to temporarily suspend production. European companies were also affected in the spring of 2024. The situation is seen as particularly critical in the military sector, where demand is high. China has just restricted exports to Japan for the new year. This applies to all companies that manufacture both military and civilian goods (dual use goods).Two examples (source: Center for Strategic and International Studies, CSIS):
F-35 fighter jet: requires approx. 410 kg of rare earths. Virginia-class submarine: consumes around 4.5 tons of raw materials.Source Center for Strategic and International Studies (CSIS): https://www.csis.org/analysis/consequences-chinas-new-rare-earths-export-restrictions
The turning point? A temporary agreementIn light of the conflict in Ukraine and potential tensions surrounding Taiwan, dependence on China is a strategic nightmare scenario for the Western arms industry. This also applies in view of the recently adopted arms measures in Europe.
At the end of October 2025, the US and China surprisingly reached a respite. An agreement was reached whereby China would suspend its export restrictions for one year. In return, the US lowered tariffs on Chinese products and China committed to increasing agricultural imports and taking measures against the fentanyl trade. It is now known that China has not kept its promise to import large quantities of soybeans from the US. The stock markets reacted cautiously at the time, but there was profit-taking on many stocks. Analysts consider the deal to be fragile. The US's goal remains unchanged: to completely establish a supply chain independent of China by 2027. However, industry representatives consider this to be impossible. The US is taking the "uranium model" as its example: just as Russian uranium is to disappear from US power plants by 2028 (import share in 2023 around 16%), the Department of Defense has set the goal that from 2027 onwards, no Chinese magnets may be used in US weapons (Source: https://www.acquisition.gov/dfars/252.225-7052-restriction-acquisition-certain-magnets-tantalum-and-tungsten). This is putting massive pressure on the US weapons industry to establish supply chains. But the US government is not sitting idly by either. Massive capital is flowing into the industry:
MP Materials: Receives hundreds of millions of dollars from the Department of Defense and private investments (including $500 million from Apple) to massively expand the only US mine. Australia pact: A memorandum of understanding worth $8.5 billion is intended to strengthen cooperation with Australian miners. However, this is merely a political signal at this stage; nothing has happened yet. Table: Rare Earth Elements ...Den vollständigen Artikel lesen ...
