Rare earth stocks are extending their rally on Monday, October 13, following President Donald Trump’s threat to impose sweeping tariffs on Chinese goods in response to Beijing’s plans to reinforce stricter export controls.
Lynas Rare Earths (OTCMKTS: LYSDY), an Australian industry leader, has gained more than 2%. At the same time, USA Rare Earth (NASDAQ: USAR), a company developing a U.S. magnet supply chain, and Mp Materials (NYSE: MP), the largest strategic metal producer in North America, are up 23% and 11% in pre-market, respectively.
More impressively, however, Australian Strategic Materials (ASX: ASM), a critical metals producer, has seen its stock soar over 30%.
Shares of a number of miners first spiked on Friday, following Trump’s warning of sweeping countermeasures against China.
“Some very strange things are happening in China! They are becoming very hostile… I will be forced, as President of the United States of America, to financially counter their move… One of the policies we are calculating at this moment is a massive increase of tariffs on Chinese products coming into the United States. There are many other countermeasures that are likewise under serious consideration,” wrote Trump on Truth Social.
Beijing’s move to introduce additional export restrictions is a continuation of similar policies that made headlines in April this year, when the East Asian country began zoning in on key minerals.
Under the new rules, though, the measures could also apply to products containing only traces of the materials. In other words, they could disrupt supply chains for materials essential to U.S. defense, robotics, and electric vehicles (EV) industries.
Interestingly, Chinese competitors have also seen notable gains today. JL Mag Rare-Earth (SHE: 300748), for instance, rose more than 17%, while China Northern Rare Earth Group (SHA: 600111) shot up 10%.
America still dependent on China
Over the weekend, analysts pointed out the surge underscored America’s heavy dependence on the Asian powerhouse, which supplies around 70% of U.S. rare earth imports.
Accordingly, the 100% tariffs mentioned by Trump could not only raise costs for U.S. manufacturers reliant on these imports but also accelerate efforts to promote domestic mining and production.
Featured image via Shutterstock
