WASHINGTON D.C.: U.S. President Donald Trump’s drive to eliminate Washington’s reliance on Chinese critical minerals by January 2027 is running into a major obstacle, with industry executives and analysts warning that domestic mining and processing capacity remains far short of what manufacturers and defense contractors need.
Since returning to office, Trump has made expanding the U.S. critical minerals supply chain a national security priority, directing tens of billions of dollars toward nearly 150 mining and processing companies to reduce China’s dominance over materials used in weapons, semiconductors and other strategic industries.
Under federal regulations, defense contractors and other manufacturers must stop purchasing rare earths, magnets, tungsten, molybdenum and tantalum from China, Russia, Iran and North Korea by Jan. 1, 2027. Although Washington has sought to curb those imports for years, companies have routinely received waivers because domestic supplies remain insufficient.
Trump has criticized those exemptions, declaring in a May 10 post on Truth Social that “ALL FEDERAL AGENCIES MUST BUY AMERICAN — NO EXCUSES!” Last week, he signed an executive order making it more difficult for defense contractors to obtain waivers.
Despite the administration’s push, interviews with 16 industry executives, investors, analysts and policymakers indicate the U.S. industry is unlikely to meet the deadline.
According to consultancy Arthur D. Little, U.S. demand for the most common type of rare earth magnet totaled about 48,000 metric tons in 2025, while domestic production reached only 300 metric tons. Capacity is expected to increase to about 5,000 metric tons by the end of the year.
The United States also has not produced tungsten since 2015 or tantalum since 1959, although several companies are working to develop new domestic mines.
“It’s going to take many more years to get the needed infrastructure in the ground to compete,” said Chris Berry, a minerals industry analyst and consultant.
While the United States has reserves of most critical minerals, it lacks sufficient mining and refining capacity. China, which controls more than 80 percent of the global minerals refining industry, has periodically imposed export restrictions on rare earths, prompting concerns over supply chain security.
The White House referred Reuters to Trump’s executive order, which says waivers can only be granted if contractors demonstrate an “exhaustive effort” to avoid Chinese materials and present a plan to phase them out.
Industry investment has also been hampered by low mineral prices, which Washington says result from Chinese subsidies that make competing U.S. projects less profitable.
Several Pentagon-backed projects have encountered delays. Ucore Rare Metals, which has developed a rare earth refining process known as RapidSX, had expected to begin refining by 2025 but now says some production will not begin until at least 2027 because of changing Pentagon requirements.
“Can the entire supply chain be propped up by 2027? Boy, I tell you, that’s a battle,” Ucore CEO Pat Ryan said.
The administration has also acknowledged it will need overseas supplies in the near term. Its US$12 billion Project Vault initiative, launched in February to build a national stockpile of critical minerals, will initially source materials from “anywhere in the world,” including China.
That approach has frustrated U.S. producers, who argue government purchases should help create demand for domestic suppliers instead.
“Defense contractors have just assumed they can keep buying Chinese products,” said Nick Myers, CEO of Phoenix Tailings, a minerals startup that received a $500 million Pentagon loan last month to build a processing facility. “The defense industry is never going to stop if you keep giving waivers.”
Although companies including MP Materials, Energy Fuels, ReElement Technologies and USA Rare Earth are expanding domestic refining and magnet production, several key facilities are not expected to begin operations until 2028 or later, underscoring the challenge of replacing Chinese supply chains before the 2027 deadline.
