U.S. firms race to seize Europe’s rare earths as Beijing tightens defense-linked supply

American firms are now rushing to grab rare earth minerals from Europe, even though China and the US officially agreed to stop fighting over this stuff for a year. Doesn’t matter.

Beijing still blocks sales to anyone linked to defense, and they’re holding the strings on global supply. That’s made whatever rare earths are left outside China a whole lot more valuable, and short-lived. Some folks in the industry say Europe could run out of usable stock in just a few months.

While Europe’s arms industry is still arguing over how to buy these materials, US buyers are moving fast and emptying warehouses across the continent.

They’re not waiting on paperwork. They’re taking what they need and leaving the locals behind. And they’re doing it with full coordination from suppliers, clear logistics, and straight-up government help.

Americans strike fast while Europe dithers

Tim Borgschulte, CFO at Berlin-based Noble Elements, put it this way: “If we look at how long it takes us on average to sell, say, a ton of terbium to a European partner, we’re talking about three to four weeks; with the Americans it’s more like three to four days.”

That speed is now showing up everywhere. Rare earths like terbium, neodymium, dysprosium, you name it, are getting snapped up by US defense companies at a pace European buyers can’t match. Why? Simple.

According to Jan Giese from Frankfurt-based Tradium GmbH, US firms are using their cash and clout to lock in contracts far upstream in the supply chain. They’re buying early and shielding suppliers from Chinese retaliation by keeping deals low-key. That gives them two things Europe lacks: materials and control.

Meanwhile, European defense contractors are trying to buy direct. No middlemen. No supplier support. And barely any planning. Borgschulte said many of his European clients don’t even know what type or quantity of rare earths they need until the very last second. That leads to rushed deals, shortfalls, and high prices.

Giese summed it up: “The Americans have a sense of urgency, a financial might and people with both mandates and expertise making decisions, all of which are things that Europe is sorely lacking.”

And it’s not just words. A source at a major German defense company said their US rivals have already stripped most of the market clean. What’s left is expensive and scarce. Chinese materials sold before April 2025, before the defense export ban kicked in, were the last to move freely. Now, everything’s tight, and turnover is so fast no one can even track how much is out there.

Europe responds with rules, cash, and missed chances

The US government owns a stake in MP Materials, which runs the only rare earths mine in America. On top of that, the Department of Defense guarantees a minimum purchase price for ten years, shielding MP from market chaos. That’s what real backing looks like.

On the other side, the EU is still writing up frameworks. It passed the Critical Raw Materials Act in 2024 and is about to launch RESourceEU, a program meant to reduce dependence on China by building supply chains elsewhere. Germany’s state development bank, KfW, launched a €1 billion fund to support raw materials investment last year. But so far, the private sector hasn’t felt much of that support.

Armin Papperger, CEO of Rheinmetall AG, said his company is doing weekly stress tests on raw materials. He admitted that the automotive arm (surprisingly, not defense) faces more problems since it needs more rare earths.

“We have billions in our stock at the moment,” he said. But not everyone’s Rheinmetall. Smaller firms can’t afford to hoard materials or risk getting stuck with unused inventory.

Hans Christoph Atzpodien, who leads Germany’s defense industry association, pushed back on claims that Europe was caught unprepared. He said mining isn’t the real bottleneck, it’s processing.

Europe, including Germany, has rare earths underground. But they’ve always outsourced refining to China. That’s now backfiring. Processing these minerals creates toxic waste and needs tech that most EU countries just don’t have.

In France, companies have called retirees back to work to bring back forgotten skills. Germany is also talking to Canada about teaming up on a submarine deal that would include investments in Canadian mining. Canada’s got over 15 million tonnes of rare earth reserves.

But it’s still not enough. Thorsten Benner from the Global Public Policy Institute said the whole continent needs to act like it’s in crisis mode. “It has to be: ‘Whatever it takes’ — just like in the Euro crisis,” he said.

Right now, though, the only ones acting like it’s urgent are on the other side of the Atlantic.

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