Sen. Jim Banks (R-IN) plans to introduce legislation in the coming weeks to spur domestic production of rare earth materials and reduce reliance on China, which dominates the global supply crucial to the energy and defense sectors.
China controls the majority of the critical mineral and rare earths supply chain and has used its dominance as leverage against the United States. The materials are used in the energy and defense sectors to develop applications such as aircraft, missiles, and batteries.
President Donald Trump has taken several steps to build a domestic supply chain, including through agreements with countries such as Australia to diversify the supply. The administration has also taken the unusual step of taking a direct stake in rare earth companies, such as MP Materials, to increase supply.
In an op-ed published on Sunday, Banks wrote that “more work remains to accomplish our longer-term objective.” The senator said his forthcoming bill would grant the Pentagon the authority to establish new rare earth facilities, expand stockpiles, and incentivize domestic production of these materials.
“The United States should have never allowed itself to become dependent on Communist China for rare earths in the first place: The strength of our defense industrial base is directly tied to our ability to make things here at home,” Banks wrote in Commonplace, a publication run by the populist think tank American Compass.
“We must end our reliance on China for rare earths, because continuing to do so only endangers American lives and places our national security at greater risk,” he said. “The stakes could not be higher.”
Banks’s comments come shortly after Trump reached a truce with Chinese President Xi Jinping regarding China’s recent export controls on rare earths. China agreed to suspend its export restrictions, imposed last month, on five additional rare earths and technologies related to production.
Still, the agreement did not address restrictions previously put in place by China. For instance, China had suspended exports of seven types of rare earth metals and magnets, requiring companies to gain a license from the ministry for any exports.
“Today, Americans are seeing the geopolitical consequences of these bad decisions play out in real time,” Banks wrote.
“In other words, Communist China just showed its cards. China controls an astonishing share of the global supply chain, and its leaders are not afraid to cut the United States off when our countries don’t see eye to eye,” he added. “The geopolitical consequences of such a move would be seismic.”
Meanwhile, Treasury Secretary Scott Bessent expressed optimism last week over the U.S.’s ability to reduce reliance on China. He told the Financial Times that China’s ability to use critical minerals and rare earth as leverage over the U.S. would end within two years.
BESSENT SAYS US RELIANCE ON CHINA RARE EARTHS TO END WITHIN TWO YEARS
The timeline is sought to be an aggressive one, given that it has been suggested that producing rare earth elements domestically could take a decade or longer, due to the lengthy permitting process.
Bessent noted that the deal between the U.S. and China could be signed in the coming weeks.
