China's Mineral Grip Tightens: American Companies Can Barely Get What They Need

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A Warning From the Business World

American companies that rely on rare earth materials from China are hitting a wall. Export restrictions, slow licensing procedures, and bureaucratic delays have made some key minerals extremely difficult — in some cases nearly impossible — to source from the world's dominant supplier.

That is the central finding of a new report from the U.S.-China Business Council (USCBC), a Washington-based organization that represents American companies doing business in China. Based on a survey of its members conducted earlier this year, the report paints a sobering picture of the current state of U.S. access to Chinese minerals.

Beijing's Export Controls: Still in Force

China introduced export controls on a range of critical minerals in April 2025, framing them as a response to tariffs imposed by U.S. President Donald Trump. The controlled materials include rare earth elements (a group of 17 metals essential for everything from smartphones to jet engines) and specialty compounds used in advanced manufacturing.

Although Trump and Chinese President Xi Jinping reached a trade agreement last October — in which Beijing reportedly committed to lifting or reducing these restrictions — the USCBC says the controls remain largely in place. Some materials are still described as "nearly unobtainable."

USCBC President Sean Stein told reporters this week that China is effectively forcing American industry to look elsewhere. "China is forcing this diversification away from China and creating a strong interest on the part of the corporate sector to find alternatives," he said.

The Numbers: Companies Searching, Few Finding Solutions

The USCBC survey covered 38 companies directly affected by China's mineral controls. The results show a sector in transition — but far from having solved the problem:

• 29% of affected companies are actively shifting to non-Chinese suppliers.
• 47% are searching for alternatives but have not yet found viable ones.
• Only a small share reported being unaffected.

That means roughly three-quarters of impacted businesses are now trying to diversify — a major strategic shift driven not by choice, but by necessity.

What's Actually Hard to Get

Among the most difficult materials to obtain, according to USCBC, are samarium cobalt — used in high-temperature applications in aerospace and defense — as well as yttrium and cadmium. These are not niche materials. They appear in defense systems, satellites, and precision industrial equipment.

USCBC Vice President Kyle Sullivan pointed to a broader challenge: it's not just the raw minerals that are hard to get, but also the finished products made from them — especially rare earth magnets. China dominates not only mining but also the refining and manufacturing stages. This makes the supply chain problem far harder to solve than simply finding a new mine.

A Problem Too Big for One Branch of Government

Stein was direct about the limits of executive action. "That's the perfect case for congressional involvement, because it can't be solved by the Trump administration alone," he said, referring specifically to the challenge of securing finished rare earth magnets.

The Trump administration has taken steps to rebuild domestic supply chains and has signed agreements with partner countries including Australia and Japan. In October 2025, Washington and Canberra established a Critical Minerals Framework. A similar bilateral arrangement with Tokyo followed in early 2026.

But experts say these efforts, while meaningful, will take years to deliver results at scale. According to the USCBC, meaningful supply diversification is unlikely within the next three years.

Investment in China Stalls

Beyond minerals, the USCBC report reveals a broader cooling of American business confidence in China. Of 134 member companies surveyed, only 49% said they plan to invest in China in 2026 — a notable decline from prior years.

The report attributes this to a combination of political uncertainty and structural disadvantages for foreign firms. Beijing's industrial policy and preferential treatment for domestic Chinese companies are cited as key factors making China a less attractive destination for U.S. corporate investment.

The Bigger Picture

China produces around 90% of the world's refined rare earths and dominates global magnet manufacturing. This near-monopoly gives Beijing enormous leverage in any trade dispute with the United States or its allies.

While a temporary truce in the U.S.-China trade war has reduced some immediate pressure, the underlying structural dependency remains. American industry, the Pentagon, and Congress are all now grappling with how to reduce that exposure — a process that experts across the political spectrum agree will be slow, expensive, and complicated.

The USCBC's message is clear: goodwill agreements are not enough. Without concrete policy, investment, and years of sustained effort, the U.S. will remain uncomfortably dependent on a geopolitical rival for the materials that power its most critical industries.

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Sources:

1. U.S.-China Business Council (USCBC) Annual Member Survey Report, June 2026 – https://www.uschina.org
2. Center for Strategic and International Studies (CSIS): "Rare Earth Export Restrictions One Year Later" – https://www.csis.org/analysis/rare-earth-export-restrictions-one-year-later
3. TD Economics: "Fractured Supply Chains & U.S. Contingency Planning: Rare Earth Minerals" – https://economics.td.com/us-rare-earth-minerals-fractured-supply-chains
4. Andersen Institute: "China's Export Control Architecture and Its Use of Critical Minerals as Strategic Pressure Points" – https://anderseninstitute.org/chinas-export-control-architecture-and-its-use-of-critical-minerals-as-strategic-pressure-points/
5. CNBC: "China to Restrict Silver Exports, Echoing Rare Earths Playbook" – https://www.cnbc.com/2025/12/31/china-silver-export-controls-2026-us-economy-prices-rare-earths-critical-minerals-xag-metals.html

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