US Defense Companies ‘Panicked’ as China Withholds Crucial Rare Earth Materials
The article reports that China is significantly disrupting the production of military equipment worldwide by restricting exports of critical rare earth minerals, of which it supplies about 90%. These minerals are essential for many U.S. weapons systems,including components for fighter jets and drones. Due to Chinese export controls, companies face sharply increased prices and supply delays, with some manufacturers halting production while seeking option sources. The Pentagon aims to eliminate reliance on China by 2027, but many defense contractors still depend heavily on Chinese materials.Experts and advocacy groups warn that China has effectively weaponized its dominance of these critical minerals and call for a united international effort to build autonomous supply chains and counter China’s economic coercion. The situation has already led to production pauses of key defense programs like the F-35 fighter jet.
It’s not quite war, but defense companies are warning that China is crippling production of military products through its export controls.
Rare earth materials, of which China supplies about 90 percent, are flowing slower than ever before, according to The Wall Street Journal.
Defense software firm Govini estimates that more than 80,000 parts used in U.S. weapons systems require minerals currently subject to Chinese export controls.
Suppliers that try to circumvent China have to pay the price.
🚨 Trump is breaking China’s stranglehold on rare earths.
China controls 90% of the metals that power everything from fighter jets to iPhones.
Now Trump is offering a minimum price guarantee to the domestic rare-earth sector to accelerate U.S. supply chain independence. 🧵 pic.twitter.com/PRzg0K5jvY
— Rod D. Martin (@RodDMartin) August 1, 2025
The Journal reported that a company in need of samarium, which goes into magnets needed for fighter jet engines, was offered the chemical element for 60 times the standard price.
Time is also lost. The report said one drone-parts manufacturer paused military deliveries for two months while it found magnets it needed from a source other than China.
In December, China stopped sending America germanium, gallium and antimony, which can be used to harden bullets and in night-vision equipment.
“In order to sustain timely product deliveries, material flow must improve in the second half” of 2025, Chief Executive Bill Lynn of Leonardo DRS said last week.
Although the Pentagon set a 2027 deadline for companies to wean themselves away from China, not all have been able to do so.
“I can tell you … we talk about this daily, and our companies talk about it daily,” said Dak Hardwick, vice president of international affairs at the Aerospace Industries Association, a trade group.
The Foundation for Defense of Democracies noted that China has weaponized its control over much-needed materials, according to Fox News.
The group said Western nations need to unite to create a reliable flow of weapons materials.
“It is time for new guardrails, muscular statecraft, and a unified international response to non-market manipulation. Building critical supply chains that are independent of China’s coercive economic practices can help unleash a wave of cooperation among free-market nations that will lift up both established allies and emerging market partners and turn the tide against China’s parasitic economic model,” it said in a report.
Critical minerals play an essential role in security and technological competitiveness, but the United States relies heavily on imports from China and other foreign sources. The Trump administration is trying to change that.
Here’s what to know: https://t.co/AjbcY7o2qq
— Council on Foreign Relations (@CFR_org) August 4, 2025
As noted by the Government Accountability Office, F-35 Joint Strike Fighter has been subject to production halts due to issues with materials, according to Defense News.
“The F-35 prime contractor, Lockheed Martin, identified prohibited Chinese magnets in the F-35 supply chain and notified DOD in 2023 and 2024. DOD subsequently paused manufacturing for several months to identify alternative suppliers,” the report said.
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