Trump Is Building an Alternative Rare-Earth Supply Chain to Replace China

FILE PHOTO: A worker waters the site of a rare earth metals mine at Nancheng county

[People News] Reports indicate that, on the eve of the Trump–Xi summit, Donald Trump quietly completed the “final piece” of his global strategic puzzle — rare earths.

When he and Japan’s new Prime Minister Sanae Takaichi signed the U.S.–Japan Framework Agreement on Critical Minerals and Rare-Earth Supply Security in Washington, a new trans-Pacific closed loop — linking resources, technology, and markets — officially took shape.

This is far more than a trade agreement; it represents a restructuring of geopolitical strategy.

1. From Tariff War to Rare-Earth War: Trump’s “Resource Starlink”

Rare earth elements — known as the vitamins of industry — are vital to defense, semiconductors, electric vehicles, and clean energy.

For the past three decades, over 90% of the world’s rare-earth supply has depended on China.

That dependence has effectively placed the global high-tech industry within an invisible “magnetic field.” Whenever Beijing turns the valve, factories around the world shiver.

Trump clearly understands this leverage.

Since launching the trade war in 2018, his real objective has never been limited to trade deficits but rather control of the supply chain — and rare earths are at the very core of that control.

After seven years of planning, the Trump administration finally achieved a three-tier supply chain in 2025:

  1. U.S.–Australia cooperation: An $8.5 billion investment to develop Australian rare-earth mines such as Lynas and Iluka, securing the raw-material base.

  2. U.S.–Japan cooperation: Japan provides separation and magnet-manufacturing technology; processing plants are established in Canada and the U.S., breaking the midstream bottleneck.

  3. U.S.–Malaysia–Thailand–Cambodia cooperation: Diversified backup supply bases in Southeast Asia reduce single-point risk.

This forms a “New Rare-Earth Silk Road” led by the West — an alternative to China’s monopoly.

In Trump’s view, this is nothing less than the “strategic vein of the free world.”

2. Japan: From “Cut-Off Victim” to “Technology Leader”

Looking back to 2010, China once cut off rare-earth exports to Japan, nearly paralyzing Japan’s high-end manufacturing.

That slap in the face made Tokyo determined to change course.

Over the next decade, Japanese companies quietly refined technologies for recycling, separation, and reprocessing, built rare-earth reserves, and developed extensive refining databases.

Now, with Takaichi signing the new agreement as both a technological and financial partner, Japan has transformed from a rare-earth victim into a technological leader.

Japan brings not only funding and equipment but also world-class know-how:

  1. Separation purity reaching 6N level (99.9999%);

  2. Recycling efficiency leading the world;

  3. Magnet-manufacturing patents widely applied in automotive, semiconductor, and defense industries.

The U.S., for its part, contributes markets, resources, and policy backing.

Together, they plan to build a separation plant in Canada, a magnet factory in Ohio, and a gallium refinery in Western Australia.

This means the U.S. and Japan are no longer just allies — they are partners in constructing a strategic industrial system.

3. Australia: The “Strategic Upstream” Powerhouse

Australia holds roughly one-fourth of the world’s rare-earth reserves and boasts the highest ore grades globally.

However, for years, Australian firms lacked refining capacity and had to send ores to China for processing.

The new U.S.–Australia agreements are reshaping that structure.

With American capital and Japanese technology flowing in, Australia is becoming the “mine of the free world”, supplying stable raw materials while building local clean-refining facilities.

This not only increases Australia’s industrial value-added but also gives Canberra new geopolitical leverage.

The U.S.–Japan–Australia triangle has formed a self-sustaining system:

  • Australia provides resources,

  • Japan provides technology,

  • The U.S. provides capital and markets.

This is precisely the “alternative ecosystem” Trump envisions — a resource civilization no longer dependent on China.

4. China’s Dilemma: Technological Control and Geopolitical Paradox

China still possesses the world’s most complete rare-earth industrial chain, especially in separation and refining, where its accumulated expertise remains unmatched.

Relying on its cascade extraction theory and advanced processes, China once surpassed Western nations in both purity and cost-efficiency by a factor of ten.

Beijing’s new rule now stipulates: Any product using Chinese equipment, technology, or containing Chinese rare-earth materials must obtain Chinese approval before being exported to a third country.

But the paradox is this: if production occurs entirely overseas, how can China enforce such control?

As technology, equipment, capital, and markets migrate abroad, China’s rare-earth monopoly may face a process of “passive de-Sinicization.”

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