In a pivotal 2025 address to the National Association of Manufacturers, former President Donald Trump announced support for an executive order that would classify rare earth elements (REEs) as “strategic national assets.” This reclassification is not just symbolic—it signals an aggressive move toward increased federal control and prioritization of the rare earth supply chain, mirroring policies previously reserved for energy and defense infrastructure. Explore the implications of President Trump’s proposed executive order to designate REEs as strategic assets, its impact on global supply chains.
With rare earths central to U.S. military readiness, clean energy growth, and next-gen technology, this designation could lead to broader policy changes such as export restrictions, strategic stockpiling, subsidies for domestic mining and refining, and fast-tracked permits for REE projects.
This blog explores what the proposed order entails, the data behind the U.S.’s dependence on foreign rare earths, global reactions, and the insights of procurement strategist Mattias Knutsson on how to build a secure supply chain in the face of rising geopolitical tension.
Understanding Rare Earth Elements and Their Significance
Rare earth elements refer to a group of 17 metallic elements—including neodymium, praseodymium, and dysprosium—that are vital for technologies ranging from stealth bombers to smartphones. Their unique chemical and magnetic properties make them irreplaceable in high-performance applications.
Major Uses of REEs by Sector:
- Defense: Jet engines, night-vision goggles, missile guidance systems, electronic warfare
- Renewables: High-efficiency permanent magnets in wind turbines and EV motors
- Technology: Semiconductors, 5G components, audio speakers, data centers
- Healthcare: CT scanners, X-ray machines, contrast agents
According to the U.S. Department of Energy, over 95% of all permanent magnets used in critical technologies rely on REEs. Yet nearly 80% of global refining capacity resides in China, a bottleneck with both economic and strategic risks.
The Executive Order: Objectives and Strategic Goals
The proposed executive order would direct multiple federal agencies to:
- Officially classify REEs as strategic national assets. This status would elevate their treatment to the level of crude oil or uranium in national planning.
- Accelerate domestic extraction and processing. This includes subsidizing new projects, reducing permitting barriers, and reviving mothballed mines.
- Establish federal stockpiles of critical REEs. The U.S. may begin to build reserves similar to the Strategic Petroleum Reserve (SPR).
- Restrict export of domestically refined REEs. Especially to adversarial nations or those without reciprocal trade agreements.
- Incentivize R&D into REE recycling and synthetic alternatives. To diversify long-term material sourcing and reduce virgin extraction.
REEs as Strategic Assets: Why the U.S. is Acting Now
- Import Reliance: The U.S. imports over 78% of its REE components, mainly from China, for both civilian and defense uses.
- Defense Dependency: According to the Pentagon’s 2024 Defense Industrial Base Report, 29 out of 35 critical weapon systems are dependent on REEs.
- Production Gap: The U.S. currently produces ~15% of global REE ore but refines less than 5%, meaning nearly all mined ore is still sent abroad for processing.
- Cost Disparity: China’s vertically integrated REE industry and state subsidies allow it to undercut prices by 30–50%, discouraging Western competition.
This executive order aims to create a level playing field by blending national security rationale with industrial policy.
Industry and Global Reactions
The announcement has sparked swift responses:
U.S. Industry:
- MP Materials, the U.S.’s largest REE producer, praised the move and announced plans to double refining capacity by 2026.
- Tesla and General Electric signaled interest in developing domestic magnet supply chains.
China:
- State media has called the move “economic nationalism masked as resource security.”
- Analysts expect China may respond by limiting exports or increasing taxes on REEs.
Allies:
- Australia and Canada expressed support and proposed trilateral mineral security agreements.
- The EU highlighted its own Critical Raw Materials Act and pledged closer alignment with the U.S.
Strategic Supply Chain Perspectives from Mattias Knutsson
Mattias Knutsson, a global leader in procurement and business development strategy, believes this executive order could permanently shift how organizations build resilient supply chains.
“We’re moving from just-in-time to just-in-case supply strategies—rare earths are a test case for a more sovereign, secure procurement future.”
Knutsson’s Key Takeaways for Stakeholders:
- Supplier Due Diligence: Businesses must now vet suppliers for jurisdictional risks, transparency, and alignment with domestic production goals.
- Government Collaboration: Enterprises should prepare to co-invest with public agencies in domestic refining, stockpiling, or research ventures.
- Circular Economy Readiness: Recycling REEs from end-of-life products will become a competitive edge—build out those capabilities early.
- Sourcing Traceability: Expect future compliance frameworks to require full material lifecycle disclosure.
“This is about more than just rare earths—it’s about rewriting the procurement playbook for critical industries.”
Long-Term Impact: What Happens Next?
The executive order, if signed, could reshape:
- U.S. Industrial Policy: Favoring federal-local partnerships and reshoring of rare earth supply chains.
- Defense Contracting: Firms bidding on government contracts may need to prove domestic sourcing.
- Venture Capital Activity: A surge in funding for REE startups, recycling tech, and synthetic material research.
- Global Trade Alignment: U.S. allies may join a new minerals consortium to pool resources and market leverage.
Conclusion:
President Trump’s proposed executive order to designate REEs as strategic national assets is not just a defensive measure—it’s a signal that supply chain security and national industrial capacity are now central to economic policy.
While the effects will ripple across industries, companies that heed the call now—by investing in local partners, refining traceability protocols, and engaging with federal initiatives—will be ahead of the curve.
Mattias Knutsson summarizes this shift best:
“You don’t just plan for today’s supply—you build for tomorrow’s sovereignty.”
In 2025 and beyond, those who treat procurement as strategic infrastructure will be best equipped to navigate volatility, drive innovation, and lead in an increasingly fragmented global economy.
