The Trump administration plans to impose federally set price floors across a range of industries, Treasury Secretary Scott Bessent said, framing it as protection against Chinese price manipulation. The clearest precedent is the 10-year neodymium-praseodymium (NdPr) floor at $110/kg agreed in July 2025 by the Department of Defense deal with MP Materials.
The Defense package includes 100% offtake for magnets from MP’s expansion, underwritten by a $400 million preferred-equity investment.
Bessent said that Washington will “set price floors… across a range of industries,” pair them with “forward buying,” and build strategic stockpiles, but he did not name additional sectors or mechanics beyond rare earths.
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Versus today’s market, the floor is protective, not punitive. China’s NdPr oxide benchmark jumped roughly 40% this summer, from about $63/kg in July to roughly $88/kg by late August. A $110/kg US backstop sits 25% above that level, insulating MP Materials if Beijing drives prices down again.
Independent analysis of the term sheet characterizes the DoD support as a modified contract-for-difference: if market prices fall below $110/kg, Washington bridges the gap. Above the benchmark, upside is shared.
The obvious hurdle: it is not a market-wide floor. The agreement covers MP Materials’ output only. As long as Chinese sellers can ship NdPr below that level, global spot pricing will still clear elsewhere, and the US will be paying a policy premium to ring-fence one domestic chain.
MP Materials’ second magnet plant is slated to begin commissioning in 2028, ultimately lifting US magnet output toward 10,000 tonnes per year. Apple has separately committed to a Fort Worth magnet supply line.
Critical minerals names rallied in recent sessions on speculation of further US backing, while defense contractors dipped after Bessent said Washington may pressure firms to curb share buybacks to focus on deliveries and R&D.
This move comes after Beijing tightened rare earth and magnet export controls. The US response now mixes equity stakes in firms with pricing floors and stockpiles as it attempts to strike a trade deal with China.
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