Shares of U.S. rare earth companies took a sharp dive on Tuesday, October 14, 2025, after a volatile premarket rally, as investors digested the latest escalation in the ongoing trade standoff between the United States and China. The downturn came on the heels of Beijing’s move to tighten its grip on exports of the critical minerals essential for everything from smartphones to fighter jets, sending ripples through global markets and raising the stakes in a high-stakes economic chess match.
According to Forbes, USA Rare Earth saw its stock plummet by more than 7% shortly after the opening bell, erasing earlier gains. MP Materials, a Nevada-based company, also reversed course—after surging 12.9% in premarket trading, its shares dropped 1.2%. Niocorp Development wasn’t spared either, falling over 5% after markets opened. Only Critical Metals managed to buck the trend, with shares climbing about 24% to over $28 per share after the open, following a dramatic 55.41% rise the previous day.
Major U.S. stock indices mirrored the sector’s turbulence. The Dow Jones Industrial Average slipped about 0.6%, the S&P 500 fell 0.8%, and the tech-heavy Nasdaq tumbled 1.3% as markets opened Tuesday. Investors appeared rattled by the latest tit-for-tat measures and the uncertainty swirling around the global supply of rare earth elements—a group of 17 minerals vital for modern technology and defense industries.
What triggered this fresh bout of volatility? It all traces back to China’s recent decision to expand export controls on rare earth minerals, a move that U.S. officials have characterized as both provocative and revealing. In an interview with the Financial Times published early Tuesday, U.S. Treasury Secretary Scott Bessent didn’t mince words: “They want to pull everybody else down with them.” He went on to argue that the new levies were a sign of “how weak” China’s economy had become, adding, “They are in the middle of a recession/depression, and they are trying to export their way out of it. The problem is they’re exacerbating their standing in the world.”
Yet, in a separate conversation with Fox Business on Monday, Bessent struck a slightly more conciliatory note. He suggested that President Donald Trump’s threat to slap an additional 100% tariff on Chinese goods “does not have to happen,” adding, “The relationship, despite this announcement last week, is good. Lines of communication have reopened, so we'll see where it goes.” Bessent also mentioned the possibility of a meeting between President Trump and his Chinese counterpart Xi Jinping, hinting at a potential avenue for de-escalation.
China, for its part, has defended its actions as both necessary and proportionate. A spokesperson for China’s commerce ministry told reporters on Tuesday that the new export control measures on rare earths and related items are “a legitimate measure” designed to protect the country’s “own national security and common international security.” The official went further, accusing the U.S. of abusing export controls, overstating national security concerns, and engaging in “discriminatory practices against China”—a clear reference to Washington’s restrictions on advanced semiconductor exports.
The rare earths dispute is hardly new, but the latest developments have put a fresh spotlight on the world’s heavy dependence on China for these crucial materials. As The Washington Post reported, China is leveraging this dominance as its “most potent tool of economic coercion”—using its near-monopoly over rare earths to extract trade concessions from President Trump and to ensure that global supply chains remain tethered to Beijing. The minerals are essential for manufacturing everything from laptops and electric vehicles to military radars and jet engines, making the issue deeply strategic for both sides.
Reuters added further detail on the ground, reporting that since September, Chinese rare earth magnet companies have been facing significantly tighter scrutiny on export license applications. Two sources with direct knowledge said that applications are now being returned more frequently with requests for additional information, and that approval times have lengthened, though they generally remain within the commerce ministry’s 45 business day deadline. The current level of scrutiny, the sources said, is reminiscent of April 2025—at the height of the U.S.-China trade war—when delays in license approvals led to shortages and even shutdowns at automotive factories.
Official Chinese data released Monday showed that rare earth exports dropped by a staggering 31% in September, a decline that some industry insiders attribute directly to the new hurdles in obtaining export licenses. "It's not surprising to see lower exports in September as getting a new license became increasingly difficult last month," one source told Reuters. The data does not break down exports by product, so it’s unclear how much of the decline was driven by rare earth magnets themselves, but the trend is unmistakable.
Meanwhile, the looming threat of even tighter controls has sparked a rush of inquiries from foreign clients eager to get their orders shipped before new rules take effect on November 8. Adam Dunnett, Secretary-General of the EU Chamber of Commerce in China, said the organization’s members remain deeply concerned about the bottleneck in rare earth product applications. “We can’t say that we’ve seen a decrease in the level of anxiety or concern,” Dunnett told Reuters. “Some companies have had their wait extended further without any response as to why that is the case.”
The tit-for-tat nature of the trade dispute was further underscored by the introduction of new port fees on both sides. Starting Tuesday, Beijing began charging a fee of $56 per net ton on U.S. vessels entering Chinese ports, a figure set to rise annually to $157 by April 2028. The U.S. has implemented a nearly identical measure, imposing a $50 per net ton fee on Chinese ships entering American ports, which will also increase each year to reach $140 by 2028. U.S. officials announced these fees earlier in the year, shortly after President Trump signed the “Restoring America's Maritime Dominance” executive order.
The rare earths saga is a vivid illustration of how economic policy, national security, and global supply chains have become deeply intertwined. For American companies, the immediate concern is access to the minerals that keep their factories running and their products competitive. For policymakers, the stakes are even higher: control over the resources that power both economies and militaries in an era of intensifying rivalry.
As the world watches and waits, the only certainty is that the rare earths race is far from over. With new rules set to take effect in November and both sides digging in their heels, the next chapter in the U.S.-China trade saga promises to be just as dramatic—and consequential—as the last.
