September 7, 2010. The East China Sea.

A Chinese fishing trawler rammed a Japanese Coast Guard vessel near the Senkaku Islands. Japan arrested the captain. Within days, shipments of rare earths from China to Japan stopped cold. No announcement. No formal ban. Beijing denied everything. But the ships sat in port and the factories in Osaka went dark.

It took weeks for the rest of the world to understand what had happened. China had turned rare earths into a weapon. Not with a bomb or a tariff — with a phone call to a port authority. That was the moment governments started paying attention to 17 metals most people had never heard of.

Sixteen years later, the weapon still works. Last week President Trump flew to Beijing for two days of meetings with Xi Jinping. Rare earths were near the top of the agenda. The White House said China would "address" American shortages of yttrium, scandium, neodymium, and indium. That word — "address" — is doing a lot of work. It is not a deal. It is not a timeline. It is a sentence designed to sound like progress while committing to nothing.

China's own summary of the summit did not mention rare earths at all.

That tells you everything. The numbers tell you even more. China's exports of heavy rare earths — yttrium, dysprosium, terbium — are still running roughly 50% below pre-control levels. The truce signed last November said Beijing would issue licenses and keep material flowing. The licenses have been slow. Sometimes they don't come at all.

Rare Earth Exchanges, which tracks this market daily, put it bluntly this week: watch the licenses, not the communiqués. The real dates are November 10, when the current tariff truce expires, and January 1, 2027, when new Pentagon rules ban Chinese-origin magnets from every American weapons system. That second deadline is the one that keeps defense contractors up at night. An F-35 carries more than 900 pounds of rare earth materials. A Virginia-class submarine needs over 9,200 pounds. And right now, most of it still traces back to China.

In 2010, a fishing boat crash was enough to shut down the supply. In 2026, the supply is technically open but moving at half speed. The weapon didn't change. It just got more polite.

From an office a few blocks from the White House, a group the Pentagon calls "Deal Team Six" is working to build an American rare earth supply chain from scratch. The team is made up of former Wall Street dealmakers. Their job is to find mines, fund refiners, and lock in magnet suppliers so the U.S. never again has to back down in a trade fight because Beijing controls the materials inside its missiles. Last year, Trump paused his tariff war after China cut off rare earth exports. Deal Team Six exists to make sure that doesn't happen twice.

Critical Metals Corp signed a binding deal Sunday to buy European Lithium for $835 million in stock. European Lithium owns the last 7.5% of the Tanbreez rare earth project in Greenland that Critical Metals didn't already control. After the deal closes, one company will own all of Tanbreez — one of the largest undeveloped heavy rare earth deposits outside China. The combined company will hold about $343 million in cash to push the project toward production.

Defense contractors are lobbying the Trump administration to push back a January 1, 2027, deadline that would ban Chinese-origin rare earth magnets from American weapons systems. The rule, known as DFARS 252.225-7052, traces the supply chain all the way back to the mine. A magnet made in Germany from Chinese oxide doesn't pass. The problem is simple: America's mine-to-magnet supply chain is not ready. MP Materials' next magnet factory won't open until 2028. Lynas has warned its Texas plant may not go ahead. Defense firms say they need more time. The Pentagon says the deadline stays.

Gracelin Baskaran, Director of Critical Minerals Security, CSIS,
May 2026

DYSPROSIUM

Permanent magnets lose their strength when they get hot. That's a problem when you're building an EV motor that runs at 150°C or a missile guidance system that can't afford to fail. Dysprosium fixes it. Add a small amount to a neodymium magnet and it holds its magnetic force under extreme heat. Nothing else does the job as well. The price tells the story: $930.70 per kilogram, up 105% this year. China controls most of the world's supply. Outside China, buyers are paying several times more. That gap is why governments are spending billions to find it somewhere else.

Australia's Lynas Rare Earths began producing samarium oxide at its Malaysian plant ahead of schedule, making it the only company outside China that commercially separates three heavy rare earth oxides: samarium, dysprosium, and terbium. The company plans to add gadolinium, yttrium, and lutetium over the next two years.

— Mining.com

Brazil's Serra Verde mine became the first outside Asia to produce heavy rare earths commercially. Chile's Penco project is moving toward permits. Argentina signed a deal with the U.S. on rare earth cooperation. Both Washington and Beijing are pouring capital into the region, and Brazil's government has set aside $8.9 billion for critical mineral projects.

— Dialogue Earth

The tariff truce signed last October expires November 10, 2026. If it lapses, China's broader export control rules from October 2025 could kick back in — rules that would deny licenses to overseas defense users and review chip applications case by case. REEx says companies should be building inventories and traceability files now.

— Rare Earth Exchanges

Dysprosium has gained 105% in 2026. Terbium is up 103%. Even the lighter elements are surging: neodymium is up 64% and praseodymium 70%. The price gap between China and the rest of the world keeps widening. Inside China, dysprosium costs about $200 per kilogram. Outside, it runs $931.

— Strategic Metals Invest