China's Rare Earth Squeeze Sends Pentagon Scrambling for $1 Billion Stockpile

In a move that screams desperation, the Pentagon is reportedly launching a US$1 billion global spending spree for critical minerals. According to the Financial Times, this stockpiling frenzy is a direct response to China's commanding lead in the rare-earth metals essential for America's defence industry.

The Pentagon is on a $1 billion shopping spree for critical minerals, the FT reports.

Public notices from the Defense Logistics Agency (DLA) reveal the Trump administration is hitting the accelerator on building up its national stockpile. This isn't just a routine top-up; it's a panicked reaction to Beijing's recent export controls on several rare earths, a stark reminder of China's stranglehold on supply chains for everything from iPhones to F-35s.

One former US defence official didn't mince words, stating, "They [the Pentagon] take stockpiling very seriously." He added that they are aggressively expanding their search for new, non-Chinese sources for these crucial defence materials. Another ex-official confirmed that the US$1 billion plan represents a significant and urgent escalation of previous efforts.

With China tightening its grip, the Pentagon is ramping up its stockpiling efforts with a massive $1 billion push.

Beijing Tightens the Screws

This all kicked off on October 9th, when China's Ministry of Commerce dropped a bombshell by tightening export controls on rare-earth items. As if that wasn't enough, Beijing followed up with more measures, expanding the list to include new rare-earth elements, processing equipment, and even superhard materials, lithium batteries, and synthetic graphite anode materials.

The Wall Street Journal called it "a nearly unprecedented" move, highlighting the severity of Beijing's play. Unsurprisingly, the Financial Times noted that these controls have sent a fresh wave of anxiety through Washington and European capitals, who are now scrambling to secure their supply of these vital metals.

Let's be clear: the FT points out that for the Pentagon, this isn't just about economics—it's a core national security issue. These minerals are the lifeblood of nearly all modern weapons systems, from radar to missile detection. Under the Trump administration, this focus has sharpened dramatically, leading to the current accelerated stockpiling. The Pentagon is now so concerned it's even looking to hoard metals it never bothered with before.

Stephanie Barna, a lawyer at Covington & Burling in Washington, spelled out the grim reality: if China decides to turn off the tap completely, it would deal a "direct, obvious and adverse" blow to America's high-tech military capabilities, crippling its ability to handle any strategic conflict.

So, what's on the DLA's shopping list? We're talking big numbers: up to US$500 million for cobalt, US$245 million for antimony, another US$100 million for tantalum from a mystery US supplier, and US$45 million for scandium sourced from Rio Tinto and APL Engineered Materials, an Illinois company with a notable presence in Japan and China.

An industry insider noted that this spending spree shows Washington "recognises the importance of these critical minerals and wants to support all of its existing domestic capacity." While they suggested it might be a bit early for full-blown hoarding by Western nations, they conceded that the level of concern is undeniably on the rise.

The DLA already has warehouses across the US filled with dozens of strategic materials, valued at US$1.3 billion as of 2023. But there's a catch: these stockpiles are locked down tight. They can only be touched in wartime or if the Under Secretary of Defense declares a defence need and gets a sign-off from the President himself.

Market Mayhem

The ripple effects are already being felt. With Chinese exports of germanium drying up, prices have skyrocketed this year. Western traders are now warning of full-blown "panic" in the market as companies scramble for supply—exactly the kind of chaos the Pentagon is desperately trying to get ahead of.

It's not just germanium. The price of antimony trioxide has nearly doubled in the last year, and even major automakers are finding it tough to get their hands on the rare-earth materials they need.

This is all backed by serious cash. Trump’s "Big and Beautiful" Act has set aside a whopping US$7.5 billion for critical minerals. This includes US$2 billion to beef up the Pentagon's stockpile, which it plans to burn through by early 2027. Another US$5 billion is tagged for supply chain investments, plus US$500 million for a credit program to spur private investment. According to one former defence official, thanks to this act, the relevant agencies are now "well-funded" to tackle the problem. The DLA, for its part, is staying quiet.

Take scandium, for example. Global consumption is only about 30-40 tonnes a year, and China is a key producer. The DLA's own filings admit that Beijing's export controls are already squeezing the supply chain for this mineral.

The DLA is hoping its deal with United States Antimony Corporation (USAC) will build up enough inventory to keep the industrial base running in a crisis, while also helping USAC weather market storms. The company's CEO, Gary Evans, says they source materials from a diverse list of countries including Canada, Mexico, Australia, and Peru, but while USAC posted US$15 million in revenue for 2024, it's keeping its actual antimony output under wraps.

To put that in perspective, US Geological Survey data shows the DLA deal is for around 3,000 tonnes of antimony metal. That's a decent chunk, but still a fraction of the 24,000 tonnes the US consumed in 2024 alone.

But some are skeptical. Cristina Belda of Argus Media said the market was stunned by the sheer volume of metals the DLA is trying to buy. Many insiders think the numbers are totally unrealistic, especially on a five-year timeline, since the amounts requested are more than what the US currently produces and imports combined.

A World Without Chinese Supply

The shopping list doesn't stop there. DLA filings also show it's eyeing other elements like tungsten, bismuth, and indium to bolster its reserves.

Solomon Cefai at Fastmarkets warns that the proposed amounts of bismuth and indium are huge compared to the global market. Trying to buy that much without access to Chinese suppliers, he says, would inevitably put immense pressure on an already tight market.

Without China's supply, analysts warn the Pentagon's buying frenzy will strain global markets.

Beijing's Official Line

When pressed on October 9th, a spokesperson for China's Ministry of Commerce gave the official line: these are dual-use items, and export controls are standard international practice. Beijing is simply acting within the law to regulate items with Chinese components to protect its national security, serve its interests, and meet its international non-proliferation duties.

The spokesperson added that as a responsible global power, China's actions are consistent with its goal of safeguarding world peace and regional stability. Beijing remains open to dialogue and cooperation, they said, to promote compliant trade and ensure global supply chains remain stable and secure. The message is clear: play by the rules, and we can talk.

Deep Throat

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Last Friday, Trump flat-out torpedoed a much-anticipated zero-emissions deal for the global shipping industry, smashing it apart at the United Nations' International Maritime Organization (IMO). The Financial Times lays it all bare: to kill the net-zero shipping pact, Trump didn’t just lean on the usual diplomatic muscle—Washington went full gangster. Think raised port fees, outright bans on ships passing through America, and direct threats, and even personal intimidation of diplomats and their families, with entry bans waved in their faces like warning flags.

The Financial Times lays it out: over a dozen diplomats, foreign officials, and industry insiders watched the US throw diplomacy in the mud at last month’s London summit. Washington came armed with bullying tactics, determined to smash the net-zero shipping pact by brute force.

US Bullying Blocks IMO’s Green Shipping Deal—Vote Delayed a Year. IMO website image.

US officials didn’t bother with backroom deals—they stalked the halls, cornering diplomats from Africa, the Pacific, and the Caribbean. The message was simple: cross the United States, and your ships might not reach America. Rock the boat, and your family could be locked out. These weren’t idle whispers. The intimidation played out in broad daylight during coffee breaks.

Social Media Taunts, Policy Upends

Trump didn’t bother hiding his true feelings. On social media, he slammed the agreement as a “global green shipping tax scam.” But this wasn’t just venting. In April, most countries had already green-lit the framework. It was set to become real policy—until Trump’s team blew it up, forcing a one-year “pause.” The global momentum froze on the spot.

One diplomat cut to the heart of it: “It’s like the streets of New York.” His country got the warning firsthand—keep backing the deal, and watch your sailors’ visas disappear. US port fees? Those would rise too. Another attendee was even more blunt: IMO bigwigs were left gobsmacked. “It’s like dealing with the mafia,” they said. “You don’t need details. You just know: cross us, and you’ll pay.”

The US State Department kept mum on the intimidation claims. Instead, American officials handed out praise to Greece and Cyprus. Those two broke rank from the rest of the EU—they cast abstention votes in the big one-year adjournment, even after they already gave the framework the green light back in April.

Secretary of State Marco Rubio, ahead of the IMO meeting in London, issued a joint statement with senior Trump officials warning that the administration was "evaluating sanctions on officials sponsoring activist-driven climate policies that would burden American consumers, among other measures under consideration." As Greece and Cyprus sided with the U.S., much of Europe—and the world—reacted with surprise.

Global Rules or American Muscle?

Chatham House’s head of global economy Creon Butler didn’t mince words. The US, he said, has ditched long-standing diplomatic etiquette. Instead, Washington's now muscling countries into backing its stance—especially on climate.

America Threatens: Support This, Your Crews and Ports Pay.

“In the very short term this might work, but in the medium term it increases the chances that non-US countries will conclude they cannot work with the US, making agreements independently among themselves which simply work around the US,” he said. Sooner or later, the rest of the world will ink deals that leave America in the dust.

The pushback reached fever pitch at the IMO. Brazil, among others, called out the methods “that should not ever be used among sovereign nations”. Washington wasn’t just rattling individuals—entire capitals, from Bangladesh to Japan and Indonesia, got notes threatening diplomatic smackdowns.

But let’s step back. The drive for a net-zero shipping pact isn’t about feel-good climate slogans.

As Niu Tanqin from Xinhua puts it: The pact itself is a brass-tacks response to global warming’s mounting cost. Whether you like it or not, global warming is simply an undisputable fact. Everyone is scrambling to stall off the climate catastrophes looming on the horizon.

So, in order to squeeze carbon emission: if your ship emits less than the set limit, you’re rewarded. Above the cut-off, you pay. China, the EU, Japan, India, Brazil—all were in. Even the big shipping companies joined the chorus.

Only a handful of oil states—think Saudi Arabia, Russia, the UAE—pushed back. Pacific island nations, unconvinced the pact was tough enough, simply abstained.

Trump Says Global Warming’s a Scam—US Walks Out.

Then, everything changed. Once Trump 2.0 manifested, the US flipped from supporter to saboteur. In his mind, climate change is a hoax—or worse, a Chinese plot to corner American interests. Stopping this agreement wasn’t just policy—it was personal. He didn’t mind stooping low—pulling out every trick in the high school bully’s playbook: pressure, threats, and outright intimidation to make sure America got its way.

One official wasn’t shy: “It was completely exceptional. I have never heard of anything like this in the context of an IMO negotiation. These people [being threatened] are just bureaucrats, they are civil servants.”

If international law becomes a mere cheap disguise, you can bet real power will be the one pulling the strings.

Pause Button Pressed—World Left Reeling

Now, the deal waits on ice for another year, while “the world stares, shell-shocked”—witnesses to a new era of American brinkmanship.

Not the first time, either. Just look at tariffs: if Washington’s unhappy, it writes its own tax bill—no debate required. Venezuela and Nigeria have both fielded threats of military action; Canada and Panama know the taste of territorial intimidation. Lawless? That’s par for the course.

  

But payback, as always, has a funny way of coming due. Today, the US bullies island nations and slaps down climate claims. Tomorrow, who’s next? When “might makes right” replaces rules, every nation that depends on order will lose out. True justice may come late—but it never skips its date. Chip away at the pillars of fairness, and sooner or later, you bury the very house you live in.

The real question: how long can America’s strong-arm show go on before the world walks out?