U.S.’ inability to replace rare earths supply from China poses a threat to its defense, warns CSIS
Workers transporting soil containing rare earth elements for export at a port in Lianyungang, Jiangsu province, China, Oct. 31, 2010.
Stringer | Reuters
As China imposes export controls on rare earth elements, the U.S. would be unable to fill a potential shortfall, according to the Center for Strategic and International Studies — and this could threaten Washington’s military capabilities.
Amid U.S. President Donald Trump’s escalating tariffs on China, Beijing earlier this month imposed export restrictions on seven rare earth elements and magnets used in defense, energy and automotive technologies.
The new restrictions — which encompass the medium and heavy rare earth elements samarium, gadolinium, terbium, dysprosium, lutetium, scandium and yttrium — will require Chinese companies to secure special licenses to export the resources.
Though it remains to be seen exactly how China will implement this policy, the CSIS report, published Monday, warns that it will likely result in a pause in exports as Beijing establishes the licensing system, and cause disruptions in supply to some U.S. firms.
The New York Times reported earlier this week that a pause in China’s rare earth element exports was already occurring.
As China effectively holds a monopoly over the supply of global heavy rare earths processing, such restrictions pose a serious threat to the U.S., particularly its defense technology sector.
“The United States is particularly vulnerable for these supply chains,” CSIS warned, emphasizing that rare earths are crucial for a range of advanced defense technologies and are used in types of fighter jets, submarines, missiles, radar systems and drones.
Along with the export controls, Beijing has placed 16 U.S. entities — all but one in the defense and aerospace industries — on its export control list. Placement on the list prevents companies from receiving “dual-use goods,” including the aforementioned rare earth elements.
Not ready to fill gap
According to CSIS’s report, if China’s trade controls result in a complete shutdown of the medium and heavy rare earth element exports, the U.S. will be incapable of filling the gap.
“There is no heavy rare earths separation happening in the United States at present,” CSIS said, though it noted the development of these capabilities is underway.
For example, the Department of Defense set a goal to develop a complete rare earth element supply chain that can meet all U.S. defense needs by 2027 in its 2024 National Defense Industrial Strategy.
Since 2020, the DOD has committed over $439 million toward building domestic supply chains and heavy rare earths processing facilities, according to data collected by CSIS.
However, CSIS said that by the time these facilities are operational, their output will fall well short of China’s, with the U.S. still far from meeting the DOD’s goal of an independent rare earth element supply.
“Developing mining and processing capabilities requires a long-term effort, meaning the United States will be on the back foot for the foreseeable future,” it added.
U.S. President Trump has also been seeking a deal with Ukraine, which would give it access to its deposits of rare earth minerals. However, questions remain about the value and accessibility of such deposits.
Implications
The CSIS report warns that the export controls pose direct threats to U.S. military readiness, highlighting that the country is already lagging behind in its defense manufacturing.
“Even before the latest restrictions, the U.S. defense industrial base struggled with limited capacity and lacked the ability to scale up production to meet defense technology demands,” its authors said.
They cite an estimate that China is acquiring advanced weapons systems and equipment five to six times faster than the U.S., originating from a U.S. Air Force official in 2022.
“Further bans on critical minerals inputs will only widen the gap, enabling China to strengthen its military capabilities more quickly than the United States,” the report concludes.
The U.S. is not alone in its concerns about China’s monopoly on rare earths, with countries like Australia and Brazil also investing in strengthening domestic rare earth elements supply chains.
CSIS recommends that the U.S. provide financial and diplomatic support to ensure the success of these initiatives.
However, China’s new export licensing system for the rare earths could also incentivize countries across the world to cooperate with China to prevent disruptions to their own supply of the elements, CSIS said.
A research report from Neil Shearing, group chief economist at Capital Economics, on Monday also noted how controls on rare earths and critical minerals have become part of Beijing’s playbook in pushing back against Washington.
Shearing notes that in addition to China’s hold on some rare earths, the supply of many other critical minerals, including cobalt and palladium, is concentrated in countries that align with Beijing.
“The weaponising of this control over critical minerals — and the race by other countries to secure alternative supplies — will be a central feature of a fractured global economy,” he said.
Marc Benioff is keeping an eye on Palantir.
The co-founder and CEO of sales and customer service management software company Salesforce is well aware that investors are betting big on Palantir, which offers data management software to businesses and government agencies.
“Oh my gosh. I am so inspired by that company,” Benioff told CNBC’s Morgan Brennan in a Tuesday interview at Goldman Sachs‘ Communacopia+Technology conference in San Francisco. “I mean, not just because they have 100 times, you know, multiple on their revenue, which I would love to have that too. Maybe it’ll have 1000 times on their revenue soon.”
Salesforce, a component of the Dow Jones Industrial Average, remains 10 times larger than Palantir by revenue, with over $10 billion in revenue during the latest quarter. But Palantir is growing 48%, compared with 10% for Salesforce.
Benioff added that Palantir’s prices are “the most expensive enterprise software I’ve ever seen.”
“Maybe I’m not charging enough,” he said.
It wasn’t Benioff’s first time talking about Palantir. Last week, Benioff referenced Palantir’s “extraordinary” prices in an interview with CNBC’s Jim Cramer, saying Salesforce offers a “very competitive product at a much lower cost.”
The next day, TBPN podcast hosts John Coogan and Jordi Hays asked for a response from Alex Karp, Palantir’s co-founder and CEO.
“We are very focused on value creation, and we ask to be modestly compensated for that value,” Karp said.
The companies sometimes compete for government deals, and Benioff touted a recent win over Palantir for a U.S. Army contract.
Palantir started in 2003, four years after Salesforce. But while Salesforce went public in 2004, Palantir arrived on the New York Stock Exchange in 2020.
Palantir’s market capitalization stands at $406 billion, while Salesforce is worth $231 billion. And as one of the most frequently traded stocks on Robinhood, Palantir is popular with retail investors.
Salesforce shares are down 27% this year, the worst performance in large-cap tech.
Salesforce and Palantir year to date stock chart.
Gemini Co-founders Tyler Winklevoss and Cameron Winklevoss attend the company’s IPO at the Nasdaq MarketSite in New York City, U.S., Sept. 12, 2025.
Jeenah Moon | Reuters
Shares of Gemini Space Station soared more than 40% on Thursday after the exchange operator raised $425 million in an initial public offering.
The stock opened at $37.01 on the Nasdaq after its IPO priced at $28. At one point, shares traded as high as $40.71.
The New York-based company priced its IPO late Thursday above this week’s expected range of $24 to $26, and an initial range of between $17 and $19. That valued the company at some $3.3 billion before trading began.
Gemini, which primarily operates as a cryptocurrency exchange, was founded by the Winklevoss brothers in 2014 and held more than $21 billion of assets on its platform as of the end of July. Per its registration with the Securities and Exchange Commission, Gemini posted a net loss of $159 million in 2024, and in the first half of this year, it lost $283 million.
The company also offers a U.S. dollar-backed stablecoin, credit cards with a crypto-back rewards program and a custody service for institutions.
The Winklevoss brothers were among the earliest bitcoin investors and first bitcoin billionaires. They have long held that bitcoin is a superior store of value than gold. On Friday morning, they told CNBC’s “Squawk Box” they see its price reaching $1 million a decade from now.
In 2013, they were the first to apply to launch a bitcoin exchange-traded fund, more than 10 years before the first bitcoin ETFs would eventually be approved. The Securities and Exchange Commission’s rejection of the application, which cited risk of fraud and market manipulation, set the stage for the bitcoin ETF debate in the years to come.
Even in the early days, when bitcoin was notorious for its extreme volatility and anti-establishment roots and shunned by Wall Street, the Winklevoss brothers were outspoken about the need for smart regulation that would establish rules for the crypto-led financial revolution.
(Learn the best 2026 strategies from inside the NYSE with Josh Brown and others at CNBC PRO Live. Tickets and info here.)
Opendoor co-founder and newly minted board chair Keith Rabois said remote work and a “bloated” workforce have been a drag on the company’s culture, as he vowed to slash headcount.
“There’s 1,400 employees at Opendoor. I don’t know what most of them do. We don’t need more than 200 of them,” Rabois told CNBC’s “Squawk on the Street” on Friday.
The online real-estate platform on Wednesday appointed former Shopify executive Kaz Nejatian as its new CEO after investor pressure caused his predecessor, Carrie Wheeler, to resign last month. Opendoor also named Rabois as chairman and said Eric Wu, who served as the company’s first CEO before stepping down in 2023, would return to the board.
The announcement sent Opendoor shares soaring 78% on Thursday, before the stock slid more than 12% on Friday. It is still up almost 500% this year, after an army of retail investors pushed up the stock price when hedge fund manager Eric Jackson began touting the company.
Opendoor year-to-date stock chart.
Opendoor’s business involves using technology to buy and sell homes, pocketing the gains.
Nothing has fundamentally improved for the company since Jackson bought shares of Opendoor in July. Opendoor remains a cash-burning, low-margin business with meager near-term growth prospects.
Rabois said he has a “high level view of the strategy” that’s needed to transform Opendoor, and that the headcount reductions are necessary to resolve the company’s cash burn.
“The culture was broken,” Rabois said. “These people were working remotely. That doesn’t work. This company was founded on the principle of innovation and working together in person. We’re going to return to our roots.”
He added that Opendoor “went down this DEI path,” referring to diversity, equity and inclusion.
“We’re gonna fix all that,” Rabois said.
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