The United States has surrendered its dominance in rare earth element processing to China, creating a significant strategic vulnerability. Decades of importing cheaper Chinese-processed rare earths caused American production facilities to close, particularly California's Mountain Pass mine and separation plant. China has weaponised this advantage, imposing export controls on rare earth materials in 2025 and demonstrating its ability to constrain American military and economic capabilities.

China now processes approximately 91 per cent of the world's rare earth separation and refining despite mining only 60 per cent of the elements themselves, whilst the US still imported more than two-thirds of the rare earth elements it consumed as of 2025. The US government has committed over £7 billion since April 2025 to rebuild domestic capacity, including Pentagon investment of £400 million in MP Materials and a Commerce Department commitment of £277 million in direct funding plus a £1.3 billion loan to USA Rare Earth for facilities in Texas and Oklahoma. However, rebuilding efforts face substantial obstacles: China retains technological expertise, controls cutting-edge separation technologies developed domestically, and banned exports of separation technology in December 2023. MP Materials' next magnet plant is not expected to begin testing until 2028.