Trick or Treat for Rare Earths
The Trick
A few days before Halloween, U.S. President Donald Trump and China’s President Xi Jinping announced a comprehensive trade deal that included a 12-month pause on new restrictions involving rare earth minerals, and removal of certain controls on export of gallium, germanium and antimony from China. The deal avoided an all-out trade war – for now.
Yet, while most observers and the broader markets celebrated the news, assuming the urgent supply concerns around rare earths and magnets had been resolved, reality quickly set in. Following President Trump’s 60 Minutes interview on November 2, during which he said the Chinese trade threats were “completely gone,” rare earth stocks fell By November 3, shares of USA Rare Earth, Inc.’s stock were down 13%; MP Materials Corp. 9% and Lynas Rare Earths Limited 8% – all bellwethers widely viewed as leading indicators of sentiment in the sector.
Post-trade deal, the situation looks more like a kid crashing after a trick-or-treating sugar high. Why is this? For starters, U.S. imports of rare earth elements continue to fall at an alarming rate. According to the World Integrated Trade Solution, a World Bank tool, U.S. imports of scandium and yttrium from China decreased by more than 80% from 2023 to 2024. The new trade deal with China doesn’t roll back restrictions on rare earths – it merely delays further tightening. . As a result, the U.S. will continue to struggle to import the materials needed for magnets used in the automotive, defense and chipmaking sectors, despite President Trump’s recent comments.
To compound the problem, growth in artificial intelligence-related build-outs like electric vehicles and robotics, and renewable energy technologies like wind and solar power, are expected to drive an estimated 8% annual increase in demand for some rare earths in the next 15 years. With these markets already underserved, it’s critical that the U.S. continue to focus on strengthening its supply chains to meet future demand.
In this environment, major consumers of rare earths cannot lose sight of the long-term challenge of regaining mineral independence from China. Recent months have brought a surge of investment into rare earth and other critical mineral companies. For instance, the U.S. government recently took a 10% stake in Intel Corporation, while the U.S. Department of Defense invested over $ in MP Materials, and the Department of Defense and Department of Commerce entered into a $1.4 billion partnership with Vulcan Elements, Inc. and ReElement Technologies Corporation. These are encouraging steps, but the rare earths industry remains minuscule, and achieving true independence will require investment in the entire industry, including mining, recycling, refining and magnet production infrastructure for many years to come.
The Treat
Although any effort to de-escalate trade tensions between the U.S. and China is welcomed by U.S. industries, original equipment manufacturers in the automobile industry as well as other industries must take a forward-looking approach to securing reliable access to rare earths. The path to rare earth independence will be long, but the companies that invest in rare earths will be best positioned to compete in the next generation of manufacturing and innovation in the U.S.
For rare earth companies and executives, this moment also presents an opportunity to lead the conversation.
Proactive Media Relations: In our day-to-day work with top-tier mining reporters and producers, it’s clear that the media are hungry for credible voices to explain the complexities of rare earths and critical minerals. Proactively positioning company leaders as expert sources can elevate visibility, shape policy discussions and build trust with investors, off-takers, and key decisionmakers. Amplifying earned coverage through digital and paid targeting, and by engaging influential third parties across the rare earths and critical minerals ecosystem, can further expand reach and impact.
Strategic Beltway Engagement: At the same time, maintaining a consistent presence inside the Beltway remains essential. With the Trump administration prioritizing rare earth and critical mineral security, rare earth companies must sustain a steady cadence of outreach to policymakers and regulators. A well-planned stakeholder engagement strategy that combines thoughtful communications, targeted advocacy and continuous education will help ensure rare earth companies remain top of mind when funding, permitting and policy decisions are made.
Still, don’t be fooled by the short-term headlines suggesting the rare earth problem has vanished. China’s dominance in rare earths was built over three decades and unwinding that advantage will take years of steady investment and coordination. The U.S. may have avoided a Halloween scare this time, but the real treat will go to the rare earth companies that use this moment to tell their story, build trust and help shape the narrative for the long haul.
Rasmus Gerdeman, an external advisor for FTI Consulting, contributed insights to this article.
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The views expressed herein are those of the author(s) and not necessarily the views of FTI Consulting, Inc., its management, its subsidiaries, its affiliates, or its other professionals. FTI Consulting, Inc., including its subsidiaries and affiliates, is a consulting firm and is not a certified public accounting firm or a law firm. FTI Consulting is an independent global business advisory firm dedicated to helping organizations manage change, mitigate risk and resolve disputes: financial, legal, operational, political & regulatory, reputational and transactional. FTI Consulting professionals, located in all major business centers throughout the world, work closely with clients to anticipate, illuminate and overcome complex business challenges and opportunities. ©2025 FTI Consulting, Inc. All rights reserved. fticonsulting.com
