Trump declared a national emergency in the mining industry as part of a new executive order designed to increase domestic production of rare earth minerals and to reduce dependency on China.
The order says that the country’s reliance on rare earth minerals “from foreign adversaries constitutes an unusual and extraordinary threat” to national security and to the economy.
Both the Interior and Energy Departments are ordered to use the Defense Production Act to accelerate the development and reuse of old mining sites for gathering rare earth minerals.
Cabinet secretaries are encouraged to consider grants for domestic rare earth miners and to determine if any tariffs should be implemented to discourage foreign imports.
Guidance regarding which projects are eligible for a loan program will be determined by the Secretary of Energy.
Shares of rare earth minerals mining company Lynas (OTC: LYSCF) jumped 5% on Thursday.
Rare earth minerals are used in everything from manufacturing and defense to wind turbines and cell phones.
More than 80% of the rare earth minerals in the U.S. are imported from China. Given the increased tensions between Washington and Beijing, there are concerns that China could restrict exports of the compounds.
Before the executive order, analysts with S&P Global projected that exports of rare earth minerals from China would likely decline in 2020 due to limited global demand and tighter supply.
Lawmakers in the House of Representatives recently introduced a bill to reduce dependency on China for rare earth minerals.
Ellen Lord, Under Secretary of Defense for Acquisition and Sustainment, testified to Congress on Thursday about the need to implement new incentives for rare earth mining in the U.S.
While increasing domestic mining for rare earth minerals could reduce the need for Chinese imports, it comes with a hefty environmental price.
But, as Trump would say, "If China doesn't care, why should we?"