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| Rare Earths |
Trump’s Rare Earth Strategy Strengthens US Supply Chains
The Trump administration aims to reduce China’s dominance in rare earths. Meanwhile, the US strengthens its domestic rare earth supply chain. Investors responded with unprecedented funding for startups, reaching $628 million in 2025. As a result, domestic production capacity and technology innovation surged, supporting both defense and green tech sectors.
Green Technology Benefits from Domestic Rare Earth Production
Electric vehicle and renewable energy industries rely heavily on rare earth permanent magnets. In the US, EVs accounted for 22% of rare earth demand last year. Domestic supply chains reduce reliance on Chinese imports, ensuring strategic materials are accessible. Furthermore, Phoenix Tailings opened a refining facility producing terbium and dysprosium without Chinese inputs, enhancing national security and climate tech resilience.
Investment and Technological Challenges Remain
US rare earth startups face high costs and slow permitting. However, AI and biochemistry advancements, as used by Alta Resource Technologies, promise cost-competitive production by 2027. Investors must balance high valuations with early-stage risk. Meanwhile, federal incentives, including guaranteed minimum prices and defense contracts, stabilize the sector and encourage sustainable growth.
ScrapInsight Commentary
US efforts to localize rare earth production mitigate China’s supply dominance. Green tech sectors benefit from reliable domestic sourcing, while startups drive innovation. Policy support will likely accelerate supply chain resilience and stabilize prices.
