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Trump Enlists Pentagon on Rare-Earth Magnets Amid Chinese Threat
- Order requires Defense Department to aid U.S. production
- Step taken to guard against potential Chinese restrictions
President Donald Trump on Monday ordered the U.S. Defense Department to spur the production of a slew of rare-earth magnets used in consumer electronics, military hardware and medical research, amid concerns China will restrict exports of the products.
Trump invoked the 69-year-old Defense Production Act -- once used to preserve American steelmaking capacity -- to remedy what he called “a shortfall” in production of the super-strong magnets made with rare-earth minerals neodymium and samarium.
U.S. capacity to produce the magnets “is essential to the national defense,” Trump asserted in issuing the designations Monday. Without action, Trump said, American industry “cannot reasonably be expected to provide the production capability” for the products.
The Defense Production Act allows the president to prioritize contracts for materials, equipment and services in order to preserve or build up domestic manufacturing capabilities. It has been invoked to compel purchases of semiconductor manufacturing equipment so companies could churn out radiation-hardened microelectronics used by the military -- such a niche market that businesses might not have made the investment on their own. It has also been deployed to finance research and procurement projects in lithium ion batteries, lightweight ammunition and other technologies.