U.S. President Donald Trump’s effort to eliminate reliance on Chinese critical minerals by January 1, 2027, is facing major challenges as American mining and processing companies remain unable to meet domestic demand.
The Trump administration has invested tens of billions of dollars in nearly 150 U.S. minerals companies to reduce dependence on China for rare earths and other strategic materials used in defence systems, electronics and electric vehicles. However, industry executives and analysts say domestic production remains far below required levels.
Federal rules require defence contractors to stop sourcing rare earths, magnets, tungsten, molybdenum and tantalum from China, Russia, Iran and North Korea by January 2027. Trump has also tightened rules on waivers, insisting that federal agencies buy American made materials wherever possible.
Despite the push, the U.S. produced only about 300 metric tonnes of rare earth magnets in 2025 against demand of roughly 48,000 metric tonnes, according to consultancy Arthur D. Little. Domestic production capacity is expected to reach only 5,000 metric tonnes by the end of the year. The United States has not produced tungsten since 2015 or tantalum since 1959, with new mining projects still years away.
Industry analyst Chris Berry said the infrastructure needed to replace Chinese supply chains cannot be built before the 2027 deadline. Meanwhile, China continues to dominate more than 80 percent of global critical minerals processing, with the International Energy Agency warning that $6.5 trillion in global manufacturing could be at risk if Beijing restricts exports.
To ease supply concerns, the Trump administration launched Project Vault, a $12 billion initiative to stockpile critical minerals, even if that means buying from foreign suppliers, including China, in the short term. U.S. companies argue that long term government orders are needed to help domestic producers expand rather than relying on imported stockpiles.
Several Pentagon backed projects remain years from full production. MP Materials expects to begin supplying magnets to General Motors later this year, while its defence focused facility is scheduled to open in 2028. Other firms, including Energy Fuels, Ucore Rare Metals and ReElement Technologies, are also expanding processing capacity but say meaningful output will not be achieved until later in the decade.
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