Critical Minerals and National Security
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Critical minerals are a national security issue because defense and industry depend on materials that the United States largely imports and, in many cases, cannot process at home. The Commerce Department found in October 2025 that the United States was 100 percent net-import reliant for 12 critical minerals and at least 50 percent reliant for 29 more in 2024. The U.S. response rests on six legal tools: the National Defense Stockpile, Defense Production Act Title III, two 2025 funds for critical minerals, a defense procurement ban on Chinese-origin materials, and trade action under Section 232.
12 + 29
critical minerals the U.S. imports for 100% and for at least 50% of its needs, 2024 data
$7.5 billion
appropriated in 2025 for the stockpile ($2 billion), an industrial base fund ($5 billion) and credit subsidies ($500 million)
Source: Public Law 119-21, section 20004
$100 billion
ceiling on loan principal the $500 million credit subsidy can support
1 Jan 2027
date from which the defense procurement ban also covers material mined, refined or separated in China, Russia, North Korea or Iran
Source: 10 U.S.C. 4872
Which legal tools does the United States use?
The tools differ in what they let the government do and in how much money stands behind them. The table lists each with its legal basis and the latest figures that appear in statute or presidential documents.
| Tool | Legal basis | What it allows | Latest figures |
|---|---|---|---|
| National Defense Stockpile | 50 U.S.C. 98 and following; Transaction Fund | Buying and holding strategic and critical materials that would be needed in a national emergency and are not produced in sufficient quantity at home. | $2 billion added to the Transaction Fund in 2025. See the stockpiles page. |
| Defense Production Act Title III | 50 U.S.C. 4533 | Purchases and purchase commitments, encouraging exploration and mining, installing equipment, subsidy payments and processing of materials. | Written findings required; $50 million ceiling per shortfall unless Congress authorises more or the President waives it. |
| Industrial Base Fund | 10 U.S.C. 4817 | Investments in critical minerals supply chains. | $5 billion appropriated in 2025, available to 30 September 2029. |
| Defense credit program | 10 U.S.C. 149(e) | Loans, loan guarantees and technical assistance for critical minerals and related industries. | $500 million appropriated for subsidy costs, supporting up to $100 billion of loan principal, available to 30 September 2029. |
| Defense procurement ban | 10 U.S.C. 4872 | Bars the Defense Department from buying covered magnets, tungsten, tantalum and molybdenum melted or produced in China, Russia, North Korea or Iran. | Extends to material mined, refined or separated there from 1 January 2027; gallium and germanium added from 18 December 2027. |
| Trade action | Section 232 proclamation of 14 January 2026 | Negotiating agreements on imports of processed critical minerals and derivative products, with price floors to be considered. | No tariffs imposed. A progress update was due about 13 July 2026; we found no public result. |
Sources: 50 U.S.C. 98h-3, 50 U.S.C. 4533, Public Law 119-21, 10 U.S.C. 4872 and the proclamation of 14 January 2026.
How much money did Congress provide in 2025?
Section 20004 of Public Law 119-21 gave the Defense Department three critical minerals funds in 2025, all available until 30 September 2029. It appropriated $2 billion for the National Defense Stockpile Transaction Fund, $5 billion for investments in critical minerals supply chains through the Industrial Base Fund, and $500 million for the Department of Defense Credit Program Account to subsidise loans and loan guarantees for critical minerals and related industries. The credit subsidy can support up to $100 billion in loan principal. Together the three appropriations total $7.5 billion.
What does Defense Production Act Title III allow, and where are its limits?
Title III lets the President buy, commit to buy, subsidise and equip production of materials, but only after written findings. The President must determine that the item is essential to the national defense, that U.S. industry cannot reasonably be expected to provide the capability in a timely manner without presidential action, and that the action is the most cost-effective, expedient and practical alternative. For a domestic industrial resource shortfall, actions above $50 million in total are barred unless an Act of Congress authorises it, and the President can waive the limits in a national emergency or on a written determination that action is necessary to avert a shortfall that would severely impair defense capability.
What does the 2027 procurement ban cover?
The ban in 10 U.S.C. 4872 covers samarium-cobalt and neodymium-iron-boron magnets, tungsten metal powder and heavy alloy, tantalum and molybdenum. The Defense Department may not buy them if they are melted or produced in China, Russia, North Korea or Iran, and from 1 January 2027 the ban also covers material mined, refined or separated in those countries. Gallium and germanium are added from 18 December 2027. The statute allows exceptions for commercial off-the-shelf items (with limits), contingency operations, recycled materials and a written national security waiver. The deadline matters for the rare earth magnet chain covered on the friendshoring page.
What did the Section 232 proclamation decide?
The proclamation of 14 January 2026 imposed no tariffs and began a negotiation track. The Secretary of Commerce's report, transmitted on 24 October 2025, found that imports of processed critical minerals and their derivative products threaten to impair national security, and that even where the United States mines a mineral it lacks processing capacity. The proclamation directs the Secretary and the U.S. Trade Representative to pursue agreements, says negotiators should consider price floors, and allows the President to consider alternative remedies later, including minimum import prices. The 180-day update was due around 13 July 2026, and we found no public account of it. For an example of a price floor in practice, the Defense Department's July 2025 agreement with MP Materials includes a 10-year price floor of $110 per kilogram for neodymium-praseodymium oxide (see offtake agreements).
Frequently asked questions
How does the United States use the Defense Production Act for critical minerals?
The U.S. uses Title III of the Defense Production Act, 50 U.S.C. 4533, to buy or commit to buy materials, encourage mining, install equipment and pay subsidies when the President finds a material essential to national defense. Total actions are capped at $50 million per shortfall unless Congress authorises more or a waiver applies.
How much has the U.S. put into the National Defense Stockpile?
Public Law 119-21 added $2 billion in 2025 for the stockpile's Transaction Fund, to improve the U.S. stockpile of critical minerals. The Defense Logistics Agency's 2025 solicitation for 7,480 tonnes of cobalt over five years was cancelled before the end of the year, according to USGS.
What changes for defense suppliers on 1 January 2027?
From 1 January 2027, 10 U.S.C. 4872 bars the Defense Department from buying covered magnets, tungsten, tantalum and molybdenum that were mined, refined or separated in China, Russia, North Korea or Iran, not only melted or produced there. Gallium and germanium follow on 18 December 2027.
Has the U.S. put tariffs on critical minerals under Section 232?
Not in the January 2026 proclamation, which imposed no tariffs and ordered negotiations with price floors under consideration. A progress update was due about 13 July 2026, and we found no public result, so any later tariff or minimum import price should be checked in the Federal Register.
Sources
Read on October 12, 2026. Figures on this page come from these documents; where a number is an estimate, the source says so.
- White House: Adjusting Imports of Processed Critical Minerals and Their Derivative Products into the United States (14 January 2026)
- Public Law 119-21 (One Big Beautiful Bill Act), section 20004. Full text read from govinfo
- 50 U.S.C. 4533 (Defense Production Act, Title III)
- 10 U.S.C. 4872 (prohibition on certain materials in defense procurement)
- 50 U.S.C. 98h-3 (National Defense Stockpile definitions)
- MP Materials: partnership with the Department of Defense (10 July 2025). Company press release
- USGS Mineral Commodity Summaries 2026: cobalt. Source for the cancelled cobalt solicitation
