Rare earth materials produced by US companies backed by billions of dollars in Washington funding are largely being sold to buyers in Japan and South Korea, because domestic American demand for them has not yet developed. This matters because the Trump administration has been pushing to build a national rare earths supply chain to reduce reliance on China, which dominates global supply and has restricted exports, raising national security concerns given the metals' use in everything from weapons guidance systems to electric vehicles. The situation highlights a mismatch: US firms such as MP Materials, Energy Fuels and Phoenix Tailings can produce the materials, but the large-scale magnet manufacturing that would consume them remains concentrated in Asia.

MP Materials, the leading US producer, generates most of its neodymium-praseodymium oxide and metal sales through a distribution deal with Sumitomo serving Japanese customers, having stopped selling to China's Shenghe Resources under its US government agreement; it plans to make its own magnets and has supply deals with General Motors and Apple. Energy Fuels, which won $725 million in conditional government funding in June, intends to send oxides to Korea and is buying assets including a South Korean metal-making plant and German magnet maker Vacuumschmelze in a $1.9 billion deal, while Phoenix Tailings secured a conditional $500 million and says Japanese customers are "clamouring" for its output. In magnet production capacity, China leads, followed by Japan at 10,000–15,000 tonnes annually, South Korea at 2,000–3,000 tonnes, and the US at 1,000 tonnes or less.