MP Materials (NYSE: MP) and USA Rare Earth (NASDAQ: USAR), two companies at the heart of Washington’s push to build a domestic rare earth supply chain, are among 10 American firms that China has cut off from dual-use exports after Beijing accused them of ties to the U.S. military.
China’s Ministry of Commerce made the announcement Monday, citing the Pentagon’s decision on June 9 to add dozens of Chinese companies to its “Chinese military companies” list. A commerce ministry spokesperson called the U.S. actions “malicious” and said Beijing’s measures were needed to protect national security and meet its non-proliferation commitments under international law.
The new restrictions go further than anything Beijing has previously imposed in this space. Earlier rules governed dual-use shipments through a licensing requirement. Now those shipments are flatly prohibited. The reach of the ban is also notably broad. any organization or individual anywhere in the world is prohibited from transferring or supplying dual-use goods of Chinese origin to the named entities, and shipments already in transit must be stopped immediately.
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MP Materials, which counts the Pentagon among its backers, operates what is currently America’s sole producing rare earth mine. USA Rare Earth is also embedded in the mine-to-magnet supply chain. Together, the two companies represent the most visible pieces of America’s effort to break its dependence on Chinese rare earth processing, which is precisely what makes them attractive leverage in an escalating technological rivalry.
The other firms added to the export control list include Aveox, a motor manufacturer serving mission-critical applications, along with Ball Aerospace and Technologies Corp, and two drone-focused units of Red Cat Holdings.
Running in parallel, China’s Ministry of Finance announced that Chinese government buyers are now barred from procuring products made by 46 U.S. companies, though U.S.-funded enterprises operating inside China are exempt from that restriction.
The combination of export controls and procurement blacklists reflects a deliberate broadening of the tools Beijing is deploying in response to American trade and security actions, with the rare earth sector emerging as one of the sharpest pressure points in the dispute.
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