Pain or gain? US moves to decouple its defence industry from China’s rare earths

Pain or gain? US moves to decouple its defence industry from China’s rare earths Directive seen as a long-overdue enforcement crackdown meant to inflict short-term contractor pain for long-term national security gain Far from a radical policy shift, industry observers view the directive as a long-overdue enforcement crackdown designed to inflict short-term contractor pain for long-term national security gain. While contractors face immediate hurdles to requalify suppliers and find non-Chinese alternatives, US analysts said the market adjustments were manageable, though delivery timetables for future military hardware could slightly stretch. They also warned that true strategic independence needed sustained, long-term capital investment in non-Chinese midstream processing. Signed on July 20 by US President Donald Trump, the executive order significantly tightens the conditions under which the Department of Defence can issue waivers for defence-critical imports from China, Russia, Iran and North Korea. US defence procurement rules strictly prohibit sourcing from adversary states certain “covered materials” – ranging from rare earth magnets to newly added inputs like gallium and germanium – with exemptions available under waiver conditions. [Image text:] Cerium Oxide ("Hligh Surface Area") Bastnasite Concentrate Neodymium Oxide Lanthanum Carbonate