Nicolai Haugsted
Billions spent, factories delayed: Trump’s mineral strategy faces its biggest test.
Donald Trump has made breaking America’s dependence on Chinese critical minerals one of the defining industrial goals of his second term. Billions of dollars have already been poured into domestic mining and processing projects, while federal contractors face a looming deadline to stop sourcing key materials from geopolitical rivals.
But with less than six months until the new rules take effect, industry leaders say the United States simply is not ready.
According to Reuters, executives, analysts and mining companies warn that domestic production remains far below demand, raising doubts over whether Washington can realistically enforce its January 1, 2027, deadline.
Under federal regulations, U.S. defense contractors and other manufacturers are expected to stop purchasing rare earth elements, magnets, tungsten, molybdenum and tantalum from China, Russia, Iran and North Korea beginning next year.
Trump has repeatedly argued that national security depends on building an American supply chain for those materials, which are used in everything from fighter jets and missiles to electric vehicles, computers and advanced electronics.
His administration has tightened the rules even further.
In a Truth Social post published on May 10, Trump wrote:
“ALL FEDERAL AGENCIES MUST BUY AMERICAN — NO EXCUSES!”
Last week, he also signed an executive order making it significantly more difficult for defense contractors to obtain waivers allowing them to continue buying Chinese materials.
Numbers expose the challenge
Industry data illustrates just how large the gap has become.
According to consultancy Arthur D. Little, the United States consumed roughly 48,000 metric tons of the most common type of rare earth magnet during 2025.
Domestic production, however, totaled only about 300 metric tons.
American companies expect manufacturing capacity to increase to roughly 5,000 metric tons by the end of this year, but that still falls dramatically short of current demand.
Several strategically important minerals remain even further behind.
Domestic tungsten production has been nonexistent since 2015, while the United States has not produced tantalum since 1959.
Projects aimed at restarting those industries remain years away from commercial production.
Industry doubts January target
Mining executives and market analysts are increasingly questioning whether Trump’s timetable is achievable.
Chris Berry, a consultant specializing in the critical minerals sector, believes the infrastructure simply cannot be built quickly enough.
“It’s going to take many more years to get the needed infrastructure in the ground to compete,” Berry said.
Pat Ryan, CEO of Pentagon-backed startup Ucore Rare Metals, expressed similar concerns after his company’s refining timeline slipped beyond its original target.
“Can the entire supply chain be propped up by 2027? Boy, I tell you, that’s a battle,” Ryan said.
Ucore had originally planned to begin refining rare earth materials by 2025, but parts of its production are now not expected to begin before 2027.
China still dominates the market
Although the United States possesses reserves of many critical minerals, refining capacity remains heavily concentrated overseas.
China currently controls more than 80% of the world’s rare earth processing industry after decades of investment and state support.
Washington has repeatedly accused Beijing of subsidizing domestic producers and flooding global markets with low-cost materials, making many American mining projects financially difficult to sustain.
Chinese officials reject those accusations and maintain the country follows World Trade Organization rules while working to keep global supply chains stable.
Billions flowing into new projects
Despite the challenges, investment continues to accelerate.
The Trump administration launched the $12 billion Project Vault earlier this year to build strategic stockpiles of critical minerals for American manufacturers.
Officials have acknowledged those reserves will initially include imports from around the world—including China—until domestic production expands.
Meanwhile, the Pentagon has committed hundreds of millions of dollars to companies developing new refining technologies and processing facilities.
Phoenix Tailings recently secured a $500 million Pentagon loan, while Energy Fuels received $725 million to expand rare earth processing.
ReElement Technologies was awarded a further $25 million investment, and MP Materials continues construction of new magnet manufacturing facilities in Texas and another plant scheduled to open for the Pentagon in 2028.
Manufacturers caught in the middle
Mining companies argue that financial support alone will not solve the problem.
Several executives say defense contractors must begin placing orders with American suppliers instead of relying on continued waiver exemptions.
Nick Myers, CEO of Phoenix Tailings, warned that extending exemptions risks delaying the industry’s development even further.
“Defense contractors have just assumed they can keep buying Chinese products,” Myers said.
He added:
“The defense industry is never going to stop if you keep giving waivers.”
For now, the administration’s ambition to rapidly replace Chinese supply chains appears to be running well ahead of the industry’s ability to deliver the minerals America needs.
