To The Moon

On the global geopolitical stage in 2025, the “Rare Earth War” has emerged as the central battleground in U.S.-China trade tensions. With China dominating rare earth supply and imposing export restrictions, the United States is accelerating efforts to build a domestic supply chain. Far from a crisis, this confrontation presents a golden opportunity for investors. I am unequivocally bullish on the rare earth theme and the defense sector: the explosive growth in electric vehicles (EVs), green energy, and military demand will drive a revaluation of rare earth companies, while defense stocks will soar on technological upgrades and government investment. Data paints a compelling picture of a market on the cusp of transformation, and proactive investors stand to reap significant rewards.

The Strategic Value of Rare Earth: The “Industrial Vitamin”

Rare earth elements (REEs), comprising 17 metals such as neodymium, dysprosium, and europium, are dubbed the “vitamins” of modern industry. They are indispensable across high-tech sectors—smartphones, EV batteries, and defense equipment alike. The global rare earth market was valued at $3.95 billion in 2024, projected to reach $6.28 billion by 2030, with a compound annual growth rate (CAGR) of approximately 8%. A more conservative estimate pegs the 2024 market at $5.139 billion, growing to $7.386 billion by 2030, with a CAGR of 6.2%. Another report predicts a leap from $7.5 billion in 2023 to $16.9 billion by 2030, boasting a CAGR of 12.3%. These figures underscore an undeniable surge in rare earth demand.

China controls 91% of global refined rare earth capacity, leaving the U.S. heavily reliant on imports. The U.S. Department of Defense reports that 95% of the military’s rare earth needs are processed in China, posing a direct national security threat. However, this dependency is catalyzing change: the U.S. rare earth market is projected to grow from $82.7 million in 2024 to $135 million by 2030, with a CAGR of 9.2%. I firmly believe this shift will spawn opportunities, propelling Western companies to the forefront.

Current Landscape: Escalating U.S.-China Tensions Catalyze Market Transformation

In October 2025, U.S.-China trade tensions escalated further. The Trump administration imposed tariffs up to 100% on Chinese goods and threatened software export restrictions in retaliation to China’s rare earth export controls. China’s Ministry of Commerce Announcement No. 61 introduced the strictest-ever rare earth and permanent magnet export regulations, requiring proof of non-military use. This triggered a $2 trillion market value wipeout on U.S. stocks, with the S&P 500 dropping 1.3%. On X, investors expressed “renewed trade war fears,” yet many see this as a “rare earth stock rebound signal.”

China defends its controls as a “sovereign right,” not a ban. Nevertheless, this has accelerated U.S. decoupling: the Department of Defense invested $400 million in MP Materials to establish a “mine-to-magnet” supply chain. JPMorgan committed $15 billion to domestic rare earth projects, fueling stock surges. I assert that this “war” will favor Western firms, and investors should view short-term volatility as a buying opportunity.

Rare Earth in Defense: A National Security Imperative and Investment Goldmine

Rare earths are irreplaceable in military applications. The U.S. military relies on China for rare earths used in F-35 fighters, Tomahawk missiles, submarines, lasers, satellites, and precision-guided munitions. For instance, rare earth permanent magnets enhance missile guidance, drone propulsion, and radar systems, improving navigation and electronic warfare capabilities. In drones, rare earths boost motor efficiency and night vision; in missiles, they support tail control and microwave sensing. The Center for Strategic and International Studies (CSIS) warns that China’s new restrictions jeopardize U.S. defense supply chains.

The U.S. Department of Defense acknowledges this as a “direct national security threat.” Yet, I am bullish on the defense sector’s rise: rare earth-related investments in the 2025 defense budget have surged, driving domestic production. Defense giants like Lockheed Martin (LMT) and Raytheon Technologies (RTX) will benefit, with projected revenue growth exceeding 15% in 2025. Rare earth recycling technologies, such as AQMS’s AquaRefining, will further enhance the sustainability of defense supply chains.

Investment Opportunities: A Bullish Case for Rare Earth and Defense Stocks

Rare earth stocks have shone brightly in 2025: MP Materials surged 21.3%, USA Rare Earth soared 32%, and Hudbay Minerals led the mining sector. Roth Capital doubled its price target for USA Rare Earth. Other top performers like Lynas Rare Earths (LYC) and Arafura Rare Earths (ARU) have delivered annual returns over 50%. On X, investors proclaim “rare earth stocks are poised for a rebound,” with price targets doubling.

I am unequivocally bullish: these stocks will ride the wave of market expansion and policy support. By 2030, rare earth demand is expected to double, with military applications accounting for 30%. I recommend investing in MP Materials (target $30+, +50% upside) and USA Rare Earth (government procurement potential). Defense stocks like LMT (F-35 relies on rare earths) offer a 20% annual return potential.

Conclusion: Embrace the Transformation, Reap the Rewards

The Rare Earth War is not an apocalypse but the dawn of a new era. The U.S.-China rivalry will accelerate technological innovation and supply chain restructuring, offering investors substantial gains. I firmly believe 2025 will be a golden year for rare earth themes and defense stocks. The data is clear—action is imperative now!

References

• [0] Grand View Research, “Rare Earth Elements Market Size, Share & Trends Analysis Report, 2024-2030.”

• [1] MarketsandMarkets, “Rare Earth Metals Market - Global Forecast to 2030.”

• [2] Maximize Market Research, “Rare Earth Metals Market Analysis and Forecast, 2023-2030.”

• [3] U.S. Department of Defense, “2024 Annual Report on Rare Earth Supply Chain.”

• [4] Statista, “U.S. Rare Earth Market Forecast, 2024-2030.”

• [6] JPMorgan Research, “Investment Outlook: Rare Earths and Critical Minerals, 2025.”

• [8] CSIS, “The Rare Earth Element Supply Chain: A Critical Assessment, 2025.”

• [9] Bloomberg, “Trump Administration Imposes 100% Tariffs on China, October 2025.”

• [10] Reuters, “U.S. Threatens Software Export Ban Amid Trade War, October 2025.”

• [11] CNBC, “S&P 500 Drops 1.3% as U.S.-China Trade Tensions Escalate, October 2025.”

• [13] China Ministry of Commerce, “Announcement No. 61 on Rare Earth Export Controls, 2025.”

• [14] Xinhua, “China Defends Rare Earth Export Restrictions as Sovereign Right, October 2025.”

• [15] MP Materials Press Release, “DoD Invests $400M in Domestic Rare Earth Supply Chain, 2025.”

• [16] JPMorgan, “$15B Commitment to U.S. Rare Earth Projects, October 2025.”

• [20] Defense News, “Rare Earths in U.S. Military Applications, 2025.”

• [21] U.S. Department of Defense, “National Security Threat Assessment, 2025.”

• [22] CSIS, “China’s Rare Earth Restrictions Impact on U.S. Defense, 2025.”

• [23] U.S. Geological Survey, “Rare Earth Production Statistics, 2024.”

• [27] Yahoo Finance, “MP Materials Stock Surge of 21.3%, October 2025.”

• [29] MarketWatch, “Hudbay Minerals Leads Mining Sector, October 2025.”

• [30] Bloomberg, “Lynas and Arafura Rare Earth Returns Exceed 50%, 2025.”

• [31] Reuters, “JPMorgan Fuels Rare Earth Stock Rally, October 2025.”

• [33] Roth Capital, “USA Rare Earth Price Target Doubled, October 2025.”

• [36] X Posts, “Rare Earth Stocks Rebound Signal, October 2025.”

• [37] X Posts, “Trade War Fears Renewed, October 2025.”

• [38] X Posts, “Investor Sentiment on Rare Earth Rebound, October 2025.”

• [42] Defense One, “Rare Earths in F-35 and Missiles, 2025.”

• [43] Military Times, “Rare Earths in Drone and Missile Technology, 2025.”

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• [46] MP Materials, “DoD $400M Investment Details, 2025.”

• [47] National Defense Magazine, “Rare Earth Applications in Precision Munitions, 2025.”

• [48] AQMS Press Release, “AquaRefining for Defense Supply Chains, 2025.”