Shares of U.S.-listed rare earth mining companies surged in premarket trading on Monday after President Donald Trump threatened to introduce steep new tariffs on Chinese imports in response to Beijing’s latest export restrictions on rare earth minerals.
As of 10:00 a.m. GMT, Critical Metals Corp (NASDAQ:CRML) was up more than 20%, while USA Rare Earth Inc (NASDAQ:USAR) soared 23.5%. Other industry players followed suit, with MP Materials Corp (NYSE:MP) gaining 11.3%, NioCorp Developments Ltd (NASDAQ:NB) climbing 12.8%, and Energy Fuels Inc (TSX:EFR) advancing 14.3%.
On Friday, Trump warned that he would impose 100% tariffs on Chinese goods beginning November 1, in direct retaliation for China’s decision to tighten controls on exports of rare earths—key inputs for many advanced technologies, from defense systems to renewable energy.
China currently dominates the global rare earth market, accounting for more than 90% of processed supply and magnet production, while the U.S. has only one operational rare earth mine. In parallel, the Trump administration is accelerating plans to strengthen domestic supply chains for critical minerals and semiconductors, including converting some federal grants into equity stakes to reduce dependence on China.
Despite his tough stance, Trump offered a more reassuring message over the weekend, saying “everything would be fine” and emphasizing that the U.S. did not want to “hurt” China.
Analysts at Danske Bank noted that investors are now closely watching for a potential meeting between Trump and Xi Jinping later this month, which could open the door to easing trade tensions. The bank estimated there is a better than 50% chance of de-escalation.
“While the 100% tariff hike would push the pre-substitution US average tariff rate to around 28%, or close to the highs seen last May, the effective increase would be more modest due to re-routing of trade,” Danske Bank said.
Jefferies suggested that Beijing is unlikely to back down in the face of these measures, arguing that it may be better positioned to withstand prolonged economic pressure. “In case of further escalation, we believe China has the upper hand, as it can take more pain for longer than the US, owing to its socialist system,” the firm said, adding that any market pullback could present opportunities in Chinese AI/data center, semiconductor, and WFE stocks.
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