Miners in the United States, including those with Trump administration backing, are exporting rare earth elements to Asian nations like Japan and South Korea, even as Washington promotes the development of a domestic rare earth supply chain for national security. This situation arises because domestic demand for rare earths in the US is slow to emerge, leading American companies to sell to countries with existing industrial infrastructure and immediate needs following China's export restrictions in April 2025. This strategy helps these US mining operations remain economically viable while the domestic supply chain catches up to the government's investment.
The US government has aggressively invested in this sector. For instance, in January 2026, USA Rare Earth received a $1.6 billion government investment aimed at expanding its capacity from mining to magnet manufacturing. Additionally, in February 2026, the administration announced Project Vault, a $10 billion financing package through the Export-Impoart Bank to establish a strategic reserve of critical minerals. Despite these substantial investments, the gap between US mining capacity and domestic demand means that American taxpayer money funds capacity that is currently exported.
Key alliances have also been forged to address critical mineral supply chains. In October 2025, a US-Japan Framework for Securing Critical Minerals was signed, and ReElement Technologies partnered with South Korea's POSCO International to develop rare earth separation and magnet production facilities within the US. These measures underscore Washington's efforts to diversify supply sources and mitigate risks, especially given China's willingness to use rare earth access as a trade lever, which has introduced a new risk premium on Chinese supply.
For investors, companies like USA Rare Earth are in a strong position, benefiting from both significant government investment and revenue stability from Asian buyers. This model is expected to be replicated as the $10 billion from Project Vault is deployed. The ongoing export of US-mined rare earths to Asia highlights the practical challenges of building an "America First" supply chain, where immediate customer needs on the other side of the Pacific are currently driving the market.
