MP Materials Halts Rare Earth Shipments to China as Tariff Battle Intensifies

MP Materials, operator of the only rare earths mine in the United States, has stopped shipping rare earth elements to China after Beijing imposed new export controls and a 125% tariff on U.S. rare earth imports. The move is part of a broader effort to “reindustrialize” the U.S. minerals supply chain and reduce dependence on Chinese processing, as the trade conflict between the two countries escalates. The company has confirmed the suspension of China-bound exports as part of this strategic shift.

China’s new export restrictions, announced in April, target seven rare earth metals and extend to certain alloys and compounds used in advanced technologies, including defense, electronics, and renewable energy sectors. These measures are expected to disrupt global supply chains for high-powered magnets, jet engine coatings, and other critical applications. China currently processes about 90% of the world’s rare earth metals and accounts for nearly 95% of rare earth magnet production.

MP Materials’ decision comes as selling under the new 125% tariff is “neither commercially rational nor aligned with America’s national interest,” the company said in a statement. The company has been investing heavily to expand domestic processing and magnet production, including a new facility in Texas, and is now stockpiling concentrate while ramping up U.S.-based operations. Previously, about 85% of MP’s concentrate was shipped to China for processing, creating a significant vulnerability in the U.S. supply chain.

The halt in shipments is already impacting the market, with shares of MP Materials dropping as much as 10% in New York trading. Industry analysts note that U.S. manufacturers in critical sectors are urgently seeking alternative sources for rare earth materials and magnets, highlighting the strategic importance of the Mountain Pass mine in California.

MP Materials says it is working closely with federal leaders and partners to ensure a secure domestic supply of rare earths, and sees the current disruption as an opportunity to accelerate the rebuilding of the U.S. rare earth supply chain.