PREMIUM: CHINA JUST BLACKLISTED AMERICA'S TWO TOP RARE EARTH COMPANIES China put a host of American companies on its export-control list today. The risky tit-for-tat is now hitting the exact firms meant to replace Chinese supply. This trend isn't ending.
Today, China's Ministry of Commerce took a shot at the United States private sector and directly aimed at a host of countries, including one in our Prinsights Pulse Premium model portfolio. The move is one that we're following closely and signals that we're well-positioned to navigate the geopolitical storm.
What specifically unfolded is that China added ten U.S. companies to its export-control list, and two of them matter most for our work here, MP Materials and our recommendation of USA Rare Earth (USAR).
MP runs Mountain Pass, the only operating rare earth mine in the U.S., and USA Rare Earth is building a magnet plant in Oklahoma. The Pentagon took a direct stake in MP last year and set a floor under its prices, which means China is now squeezing a company Washington itself is funding.
The other eight are key names in the defense sector, among them Oshkosh Defense, Ball Aerospace, L3Harris Maritime, and the drone makers Red Cat and Teal Drones. China's finance ministry went further the same day, barring 46 American companies from Chinese government procurement.
Beijing called this retaliation for the U.S. widening its Chinese military companies blacklist on June 9. Based on our analysis, all of these actions are part of a much broader and increasingly fierce fight for the entire rare earth's supply chain between the Asian Superpower way ahead and the one struggling to keep up.
China Is Hitting America's Rare Earth Alternatives As Battles Intensify
The new order bans the export of Chinese dual-use goods to those firms, and it extends beyond China's borders. The move serves to bar anyone in any country from routing Chinese-origin material to them. That's the part that matters, and in chess terms, it's like a move away from the final checkmate. The companies Washington is counting on to wean itself off Chinese rare earths are now direct targets that are increasingly in the crosshairs. What China is doing today is going after the very supply chain meant to replace it.
In our February Prinsights Pulse Premium monthly issue, we detailed and recommended a rare earths producer to our model portfolio for exactly this sort of development.
Our research-backed analysis showed that China's hold on mining, and more so on processing, would force the West to build its own supply chain, and that the fight would spread along the entire rare earths value chain. The spread would impact sectors ranging from the mine sector to finished magnets.
Right now, that fight is escalating. We expect these disputes to continue moving up and down that chain. The dynamics offer major leverage for China while potentially being detrimental to the U.S. and Western allies' national security and technology efforts over the near term.
The November 10 Truce Is Much in Doubt
China offered an olive branch as a fragile truce to some of its other restrictions in this arena. After the Busan summit in South Korea, where President Trump and President Xi Jinping met last October, the Asian giant suspended some of the sweeping rare earth controls it announced on October 9, 2025, for one year.
In return, the Trump administration paused the steep tariffs it had threatened on Chinese goods.
However, as we have repeatedly identified for Prinsights Premium members, that truce never lifted a separate set of rare earth controls China imposed in April 2025. The leverage here belongs to China.
When Trump and Xi met again in Beijing in May, we delivered analysis unpacking how the summit produced no rare earth deal and left that leverage in place. Over the past several months, we have reported November 10, the day the one-year suspension expires, as the date to watch in this space for investors or and key policymaker.
Today's escalation makes it far harder to see Beijing renewing it, with the suspension in play capable of being switched off as fast as it was switched on.
China Mines 70% of the World's Rare Earths and Refines 90%
Rare earths are the first weapon China can quickly grab hold of because it still controls roughly 70% of the mining and close to 90% of the processing.
Ultimately, there is no quick Western substitute for the heavy rare earths like dysprosium and terbium that go into the permanent magnets in electric vehicles, wind turbines, missiles and military drones.
A single F-35 needs about 900 pounds of rare earth materials, and the Pentagon has already committed more than $2.5 billion dollars to rebuilding a domestic rare earth chain that is still years from scale.
Every escalation does the same thing. It raises the value of the supply being built outside China and the few producers building it, which is why the names China just blacklisted are strategic assets in this fight.
We have laid out how to position for this trend in several of our Founders+ monthly issues including our May 2025 issue and the recent April issue. For Pulse Premium members, our February issue detailed a specific rare earth recommendation focused on a producer positioned as both a non-China supply source and a downstream partner for Western buyers.
Based on today's action, we expect our ongoing thesis, not just for rare earths, but many more metals, including one in our monthly issue out this week, to keep playing out in our favor. Expect the supply chain warfare among the rare earths value chain to only intensify from here.