Rare Earth Metals: What They Are and Why They’re Such a Big Deal Right Now

As the trade war between the world’s two largest economies escalates, a new flash point has emerged: rare earth metals. 

In response to the Trump administration’s sweeping tariffs in April — which levied duties as high as 145 percent on Chinese exports to the United States — China not only retaliated with tariffs of up to 125 percent on American goods, but also started leveraging its near-monopoly on these unique materials, which are essential to building modern tech hardware. 

As it turns out, these soft, heavy metals — prized for their magnetism, conductivity and resistance to corrosion —  are found in virtually anything that powers on and off. They’re vital ingredients in the production of everything from semiconductors to fighter jets — and, up until 2023, China controlled 99 percent of the global supply. Today, it still produces about 60 percent, even as other countries like the U.S. and Australia ramp up domestic mining efforts. Even so, China continues to dominate processing, refining 90 percent of the world’s rare earth materials through an infrastructure it has strategically built since the 1980s. 

With no immediate substitutions lined up, it’s unclear exactly how the U.S. will respond to China’s countermeasure. So far, plans include investing in domestic facilities while fast-tracking offshore deep-sea mining, pouring millions into a new alliance with Australia to disrupt China’s market stronghold and bullying countries like Greenland and Ukraine into sharing their mineral wealth. 

From smartphones and electric vehicles to MRI machines and missile systems, the stakes are high. And as trade tensions heat up, locking down a steady, diversified supply of rare earth metals isn’t just an economic priority — it’s a matter of national security.

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What Are Rare Earth Metals?

Rare earth metals are a group of 17 elements — the periodic tables’ entire series of lanthanides, plus scandium and yttrium — known for their unique magnetic, conductive and chemical properties. They’re found in batteries, magnets and catalysts, and have become essential in building everything from flat-screen TVs to surgical lasers.

Rare earth metals aren’t exactly “rare” in terms of quantity — they exist everywhere, and can be mined all over the Earth’s crust. However they’re often dispersed and mixed with other elements, making extraction and separation costly and difficult, as their unique chemical properties require processing large amounts of raw ore to obtain “pure,” usable forms.

What Are Rare Earth Metals Used For?

There’s a reason China is leveraging its rare earth metal supply amid rising trade tensions: These metals are built into almost every type of modern technology, from the smartphones in our pockets to military-grade defense systems. It’s a huge play, and here’s why:

Electronics

In smartphones, rare earth metals power tiny speakers, microphones and haptic motors. They light up vivid displays, stabilize cameras and boost wireless charging and signal strength. The magnetic properties of neodymium and praseodymium (NdPr) are so concentrated that they allow these devices — as well as other consumer electronics like laptops and hard drives — to deliver high performance within modern, compact designs.

Clean Energy

Neodymium, dysprosium and other rare earths are used to build lightweight, high-efficiency motors that power electric vehicles and wind turbines. Cerium and lanthanum are important for clean energy technologies. In solar panels, for example, they improve light absorption in photovoltaic cellsIn hydrogen fuel cells, they facilitate the chemical reactions that generate hydrogen-based energy.

Defense and Military

Precision-guided missiles, radar systems, smart bombs and night vision goggles all rely on rare earth metals to function, which are also essential to a series of military-grade vehicles — from destroyers to unmanned drones. In fact, F-35 fighter jets contain more than 900 pounds of rare earth elements. But that’s lightweight compared to a Virginia-class submarine, which requires around 9,200 pounds.

Lighting, Displays and Lasers

Europium and terbium produce the bright, vivid colors as seen in LED lights, televisions and computer screens. They’re also used in lasers, helping to generate precise wavelengths of light within laser pointers, medical devices and assorted industrial tools.

Catalysis

Thanks to their catalytic properties, lanthanum and cerium are often built into a car’s catalytic converter to help convert toxic gases — like carbon monoxide and nitrogen oxides — into less harmful emissions. Cerium, in particular, acts as an oxygen buffer, storing and releasing oxygen to optimize these reactions. In petroleum refining, both metals are used to break down heavy crude oil into lighter, more valuable products like gasoline and jet fuel.

Medical Imaging

Rare earth metals like gadolinium, are essential to medical imaging. In MRI and PET scans, their strong magnetic properties enhance image contrast and improve sensitivity, helping to detect tumors, neurological disorders and cardiovascular issues more precisely. Gadolinium-based contrast agents, in particular,  help differentiate tissues, providing clearer, more detailed images for precise diagnosis. 

Aerospace and Aviation

Rare earths contribute to advanced alloys and jet turbine engines, enhancing performance and durability. They are essential in components that require resistance to high temperatures and mechanical stress.

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Where Do Rare Earth Metals Come From?

Rare earth metals aren’t exactly rare — they’re found all over. What really matters is which countries are pulling them out of the ground and building the infrastructure to process them. And in that regard, China sits firmly at the top. 

According to the International Energy Agency, China produced 61 percent of rare earth minerals — or 240,000 metric tons — and processed 92 percent of the total global supply in 2023. In terms of production, the United States ranks second, producing 43,000 metric tons, followed by Myanmar (35,000 metric tons) and Australia (18,000 metric tons). 

Global rare earth mineral production has tripled since 2017, rising from 132,000 to 390,000 metric tons worldwide. Unsurprisingly, the world’s largest rare earth mining company is based in China. Called the China Northern Rare Earth High-Tech, it controls the 75-mile Bayan Obo complex in Inner Mongolia. 

By comparison, the United States has just one rare earth mine — the Mountain Pass mine. Located in California’s Mojave Desert, it’s the largest mining and processing facility in the Western Hemisphere. Still, in 2024, 70 percent of the U.S.-bound rare earth imports came from China. 

Increasing Rare Earth Metal Production in the U.S.

Following the U.S.-China tariffs escalation, the Department of Defense (DoD) announced a partnership with MP Materials to secure critical minerals and begin establishing a domestic NdPr supply chain for magnets. Through the partnership, the DoD will invest an initial amount of $400 million in MP Materials to expand its current manufacturing capabilities. The company will also receive $150 million from the DoD to expand its rare earth processing facility. In return, the DoD will be the MP Materials largest shareholder and create a guaranteed price floor of $110 per kilogram of NdPr, double the current market price.

Though it is a significant investment in increasing domestic rare earth metal production, the partnership was met with criticism according to the Federation of American Scientists. Because the investment set a high price floor, the DoD will pay the difference between the market price if it is below the floor price, which could amount to $300 million a year. However, if the price of NdPr increases, the department will receive 30 percent of the amount above the floor.

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Which Rare Earth Minerals Are Restricted?

On April 4, China’s Ministry of Commerce placed export restrictions on seven select rare earth metals. Citing concerns of national security, exporters are now required to secure special government-issued licenses when moving the following elements — including any oxides, alloys, compounds or mixtures — out of China:

1. Samarium: Used in high-performance magnets for EVs and wind turbines, as well as in cancer treatments and nuclear reactors.
2. Gadolinium: Essential in MRI contrast agents, phosphors for lighting and high-performance alloys.
3. Terbium: Activate green phosphors in LED lights and displays; also used in fuel cells and electronic materials.
4. Dysprosium: Critical for high-temperature magnets in EVs and wind turbines; also, and used in lasers and optical materials.
5. Lutetium: Used in PET scan technology, petroleum refining and high-temperature superconductors.
6. Scandium: Alloyed with aluminum to create lightweight, durable materials in aerospace and sports equipment; aAlso acts as a conductive agent in fuel cells.
7. Yttrium: Important for phosphors in LEDs and TVs, superconductors, lasers and cancer radiation therapy.

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