On precision-guided ballistic missiles favored by the Army, magnets containing Chinese rare earth materials rotate the tail fins that allow missiles to home in on small or moving targets. And on new electric and battery-powered drones being adapted by Marines, rare earth magnets are irreplaceable in the compact electric motors…China’s decision to retaliate against President Trump’s sharp increase in tariffs by ordering restrictions on the exports of a wide range of critical minerals and magnets is a warning shot across the bow of American national security, industry and defense experts said…“This decision is hugely consequential for our national security,” said Gracelin Baskaran, director of the Critical Minerals Security Program with the Center for Strategic and International Studies…”China mines and refines most of the world’s rare earths, and dominates the downstream supply chain,” said Aaron Jerome, a trader at Lipmann Walton and Co., a metals trading company based in Britain. That supply-chain dominance allows Beijing some say over just how much weaponry that is dependent on the rare earths will cost, giving it enormous power over America’s defense industrial base…Mr. Jerome pointed to what he called “the F-35 magnet debacle.” Back in 2022, the Pentagon temporarily stopped deliveries of Lockheed Martin’s F-35 after the manufacturer acknowledged that an alloy made in China was in a component of the stealth fighter jet, violating federal defense acquisition rules …But just one month later, the Pentagon allowed the deliveries to continue while it looked for another source for the magnets…“U.S. global leadership in aerospace and defense hinges on a secure and resilient supply chain — particularly for the critical minerals used in the production of cutting-edge aircraft technology,”…In 2017, during his first term, Mr. Trump signed an executive order aimed at boosting U.S. domestic production, and President Joseph R. Biden Jr. followed suit during his administration, allocating even more money for rare earth extraction and refinement facilities.

“It is important to be aware that there is a big difference between China requiring export licenses as compared to a ban on exports. China has announced export license requirements on critical minerals before but in many cases there weren’t any actual signs of declining import volumes,”…Pickard also believes China's move is more of a "political message" and that exports may not actually decrease…“China’s ban on rare earth exports to the US slows access to a number of minerals crucial to modern vehicle production,” said manufacturing expert Sam Fiorani of AutoForecast Solutions to Yahoo Finance. “Minerals such as yttrium and dysprosium are important for electric vehicle manufacturing as key ingredients for batteries and motors. Other minerals could slow production of smaller motors, speakers, camera lenses, and LEDs,” which are used in auto production as well…Top US EV manufacturers like Tesla, GM, Rivian, and Ford (F) are deeply exposed, as they assemble many motors for their vehicles in the US. Conversely, rivals like European, Japanese, and, to a lesser extent, Chinese manufacturers will benefit from their access to these important resources only available from China…Tesla has cut its use of rare earth metals in its motors by 25% and intends for its next-generation EVs to be rare-earth free. GM said it is "exploring options to limit or potentially eliminate rare earth materials in EV motors" but did not provide a timetable.

COMMENT: Manganese-Bismuth (MnBi) permanent magnets are a promising alternative to rare-earth magnets