Global markets are once again caught in the crossfire of a growing geopolitical clash between the United States and China — this time over control of critical minerals essential to high-tech and defense industries.
Shares of U.S. rare earth mining firms surged in premarket trading on Tuesday, extending the previous session’s dramatic rally. The surge followed renewed threats from U.S. President Donald Trump, who announced a 100% tariff on all Chinese imports starting November 1. The move came in response to Beijing’s decision to tighten export controls on rare earth minerals — elements that are crucial in the production of electric vehicles, wind turbines, semiconductors, and military systems.
By early trading, Critical Metals was up more than 27%, Energy Fuels rose 11%, USA Rare Earth added 10%, MP Materials gained 7%, and NioCorp Developments jumped nearly 9%.
The rally builds on Monday’s explosive session, when rare earth producers recorded some of their strongest gains in years — Critical Metals closed up 55%, MP Materials surged 21%, and USA Rare Earth climbed 18% — following China’s announcement of new export restrictions aimed at protecting “national resource security.”
Beijing’s rare earth policy shift is widely viewed as a strategic warning to Washington, highlighting China’s dominance in a sector that underpins the global technological and clean energy transition. According to official data, China produces roughly 70% of the world’s rare earth minerals and processes close to 90% of them, giving it unparalleled leverage in global supply chains.
“These latest moves show that rare earths have become a geopolitical chess piece,” said Dr. Alicia Romero, a trade policy analyst at the Global Minerals Institute. “Both countries understand that whoever controls these resources controls the future of advanced technologies.”
Trump’s hardline tariff announcement rattled markets late last week, though he appeared to temper his tone on Sunday, assuring that “trade relations with China will be fine.” Analysts say the mixed signals reflect both economic pressure and political posturing ahead of U.S. elections.
In response, the U.S. administration has reportedly accelerated discussions to expand domestic mineral production and diversify supply sources through partnerships with Australia, Canada, and Africa. However, the U.S. remains highly dependent on Chinese refining capabilities, with only one major operating rare earth mine — MP Materials’ Mountain Pass facility in California.
“While the U.S. seeks to decouple strategically, rebuilding supply chains will take years,” said Marcus Lee, commodities strategist at Apex Global. “Meanwhile, China’s export curbs remind the world just how central it remains to modern industry.”
The tensions come at a pivotal time for the global economy. As governments push for electrification and green energy transitions, demand for rare earths — such as neodymium and dysprosium — is expected to quadruple by 2035, according to the International Energy Agency. Any disruption in supply could slow progress in clean energy deployment and defense modernization.
For now, investors appear to be treating U.S. rare earth producers as both a geopolitical hedge and a strategic opportunity. But analysts warn that volatility could spike again as Washington and Beijing test each other’s economic resilience.
“Rare earths have become the new oil of the 21st century,” Romero added. “And just like oil in the past, they’re reshaping global alliances and rivalries.”
