China Dominates Rare Earths Supply Chain Despite US Efforts

China currently dominates the rare earth minerals market, controlling about 70% of global mining output and nearly 90% of processing capacity, which are crucial for technologies like smartphones, electric vehicles, and defense systems. President Trump’s administration has responded by aggressively investing in domestic and allied mining projects, easing environmental regulations, and introducing subsidies to reduce U.S. dependence on Chinese supply chains. Despite these efforts, China's recent export controls have tightened, requiring government approval for shipments of magnets or alloys containing Chinese rare earths and adding more critical elements to its restricted list. Experts warn that these trade tensions over rare earths could escalate unpredictably, potentially affecting global high-tech industries and broader U.S.-China relations. Financial analysts view the rare earths competition as a defining strategic and investment theme for 2026, highlighting its impact on trade, technology, and global economic power balances. The U.S. aims to reclaim control over its supply chains, but China's structural and longstanding dominance presents a formidable challenge.