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At the time, Washington elites were drunk on globalization. National security didn’t even enter the conversation. As one expert later put it, “We were focused on the internet and globalization, not on where our materials were coming from,” adding that “Policy became episodic rather than strategic.”
GM executives insisted they were simply trimming “non-core” operations to please Wall Street. But the timing gave away the game. GM was simultaneously jockeying for permission to open a car plant in Shanghai. Beijing wanted U.S. defense magnet technology. GM wanted access to the Chinese market.
China got what it wanted in full. America got played.
Within twelve months, China duplicated Magnaquench’s technology and began mass-producing the same critical military magnets inside their borders. U.S. factories shut down. Equipment was shipped overseas. One of America’s most vital military supply chains vanished almost overnight.
The Collapse of Mountain Pass Finished the Job
The damage didn’t stop with GM. In California’s Mojave Desert, the Mountain Pass mine once supplied much of the planet’s rare earth minerals — the lifeblood of precision weapons.
Then U.S. regulators tightened environmental rules while China subsidized its own industry. American production buckled. Mountain Pass went dark, equipment rusted, and China seized the field uncontested.
As one industry leader explained, “The United States had Mountain Pass and a few other capabilities tied to companies like GM. But our total capacity was under 2,000 metric tons a year. Meanwhile, China poured money into innovation, refining and manufacturing at a scale that far exceeded what we ever had.”
Beijing didn’t simply mine the minerals. It mastered the higher-value steps — refining, processing, and manufacturing the finished magnets that power everything from jets to submarines. By the 2000s, America’s entire rare earth ecosystem had evaporated. China owned the supply chain from dirt to finished product.
China Controls the Minerals Inside Every U.S. Weapon
Rare earth minerals aren’t luxury items. They are the guts of the American war machine.
Missile guidance systems. Night-vision goggles. F-35 avionics. Submarine sonar. Hypersonic weapons. All rely on the magnets China now controls.
As one expert bluntly put it, “They steer missiles, power radar and drive the night-vision goggles Marines wear in the field. If it moves, sees or communicates in today’s military, there’s probably a rare-earth element in it.”
Beijing knows this leverage — and isn’t afraid to use it. In April 2025, China choked off exports in response to Trump’s tariffs. Auto plants worldwide shut down within days. Ford was forced to halt production in Chicago. Japanese and European manufacturers went silent.
According to analysts, “When China required export licenses, some U.S. factory lines literally stopped.”
Trump Moves to Rebuild What Political Elites Gave Away
After decades of drift, the Trump administration finally hit the brakes. The Pentagon bought a major stake in MP Materials — America’s key rare earth producer — and injected hundreds of millions more to restart mining, refining, and magnet production.
Defense officials declared, “We are taking decisive action to restore our domestic critical minerals supply chain, revive our industrial base, and rebuild our military to achieve President Trump’s goal of peace through strength.”
Private industry followed. Apple dropped $500 million into a partnership to fuel magnet production, with CEO Tim Cook stating, “American innovation drives everything we do at Apple, and we’re proud to deepen our investment in the U.S. economy. Rare earth materials are essential for making advanced technology, and this partnership will help strengthen the supply of these vital materials here in the United States.”
But even with mining underway again, experts warn the comeback will take years. As one noted, “It’s a ten-year project, not something we can do in a year.”
International partnerships are rolling out across five continents, but even those investments aren’t enough. As another analyst warned, “The international deals may buy time, but they’re no substitute for restoring the industrial base that once made us the world’s undisputed source of strategic minerals.”
America Is Trying to Recover — But China Isn’t Slowing Down
Mountain Pass is alive again. Equipment is running. Workers are back. But China still dominates every corner of the rare earth world. And every missile, jet, sensor and weapons system America builds still depends on minerals Beijing can shut off with a single political decision.
This isn’t just a supply chain problem. It’s a national security crisis created by decades of political negligence and one disastrous GM deal that handed Beijing the keys to America’s military engine room.
