Trump’s Rare Earths Power Play: U.S. Stakes in Canadian Miners Spark Ethical and Market Shockwaves
The U.S. stock market suffered its steepest drop in six months on Friday, with the S&P 500 sliding nearly 3% after former President Donald Trump threatened major new tariffs on Chinese goods over Beijing’s grip on the global rare earths market.
China recently expanded its export controls on rare-earth elements, adding tungsten, tellurium, bismuth, indium, and molybdenum to its restricted list — on top of dysprosium, gadolinium, scandium, terbium, samarium, yttrium, and lutetium. Exporters must now secure licenses and disclose end-uses, tightening Beijing’s dominance over strategic minerals.
While markets broadly slumped, Canadian rare earths developer Trilogy Metals (NYSE:TMQ) soared 140% after Washington acquired a 10% stake in the company, with warrants to raise that to 17.5%. The Trump administration also moved to reverse Biden-era restrictions on the Ambler Road project in Alaska, reviving plans for a 211-mile access road into a mineral-rich region containing copper, cobalt, germanium, and gallium. Shares of Trilogy have now skyrocketed over 1,200% in the past year, giving the once small-cap miner a market value near $1 billion.
But the deal has raised serious governance and ethical concerns. “It’s unusual for any government to own equity in a domestic company — let alone a foreign one,” said Richard Leblanc, a governance and ethics expert at York University. “This creates the risk of a conflict of interest.”
Trilogy isn’t the only case. The U.S. Department of Energy recently struck a deal with Canada’s Lithium Americas (NYSE:LAC), while the Department of Defense invested in Nevada-based MP Materials (NYSE:MP). That package included a 15% DoD equity stake, a $150 million loan, and a $110/kg price floor guarantee for neodymium-praseodymium magnets — nearly double the market price. Backed by government guarantees, MP shares exploded, surging 530% year-to-date and sparking a rare earths sector-wide rally.
Other miners have also seen outsized gains: NioCorp Developments (NASDAQ:NB) is up 603%, Ramaco Resources (NASDAQ:METC) has climbed 412%, Lynas Rare Earths (OTCPK:LYSCF) is up 288%, and USA Rare Earths (NASDAQ:USAR) has jumped 257% this year.
Industry leaders say more such investments are coming. Energy Fuels (NYSE:UUUU) CEO Mark Chalmers argued that America needs to spread its bets across multiple miners to reduce reliance on China. A White House official confirmed the administration is exploring additional equity deals and price support mechanisms to secure long-term critical mineral supply.
