US Critical Minerals Industry Unlikely to Meet 2027 Deadline to Cut China Reliance

An aggressive push by the Trump administration to wean the U.S. off critical minerals from China by January 2027 is facing significant hurdles, as the domestic mining and processing industry is not prepared to meet the deadline. Despite tens of billions of dollars in federal support, American producers are years away from having the capacity to replace Chinese supply chains for materials essential to national security and manufacturing, according to a Reuters report citing numerous industry executives and analysts.

The 2027 Challenge

A federal regulation sets a January 1, 2027, deadline for U.S. defense contractors and manufacturers to stop sourcing rare earths, magnets, tungsten, and other key minerals from China, Russia, Iran, or North Korea. President Trump has reinforced this goal, signing an executive order to make it more difficult for companies to obtain waivers, which have historically been granted due to insufficient domestic supply.

The supply and demand gap remains vast. According to data from the Arthur D. Little consultancy, U.S. demand for the most common type of rare earth magnet was approximately 48,000 metric tons in 2025, while domestic sources supplied only 300 metric tons. While U.S. firms are projected to have the capacity to produce 5,000 metric tons by the end of this year, this still falls far short of national needs.

Domestic Production Lags

The U.S. possesses reserves of most critical minerals but lacks the industrial capacity to process them, a sector where China controls over 80% of the global market. The country has not produced tungsten since 2015 or tantalum since 1959. Industry analyst Chris Berry stated that it will take "many more years to get the needed infrastructure in the ground to compete," as reported by Reuters.

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Several Pentagon-backed companies are working to scale up but face significant delays:

• MP Materials (MP), a key U.S. producer, is building a magnet facility for General Motors and a separate one for the Pentagon, which is not slated to open until 2028.
• Ucore Rare Metals (UCU), which received Pentagon funding, has delayed the start of some production until 2027 at the earliest due to what its CEO described as changing demands from the Pentagon.
• Other firms like Energy Fuels (UUUU) and ReElement Technologies are also developing processing capabilities but are not expected to reach significant scale for several more years.

Policy and Market Headwinds

Complicating the push for self-sufficiency is the administration's own strategy. In February, it launched Project Vault, a $12 billion program to stockpile critical minerals for U.S. manufacturers. However, officials acknowledged in April that the stockpile will initially need to be sourced from global suppliers, which could include China.

This has frustrated some domestic producers who argue that defense contractors need to be forced to buy American. "Defense contractors have just assumed they can keep buying Chinese products," Nick Myers, CEO of minerals startup Phoenix Tailings, told Reuters. The International Energy Agency has warned that $6.5 trillion of global manufacturing is at risk if Beijing were to impose export restrictions on these vital materials.