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China Targeted the Two Stocks Built to Replace It

This one is different from your usual earnings trade. What happened on June 22 wasn’t a miss or a guidance cut. It was a government action, targeting two companies by name, in a sector that runs through virtually everything the modern economy depends on.

China’s Ministry of Commerce added 10 US companies to its export control list that day. Among them: MP Materials (NYSE: MP) and USA Rare Earth (Nasdaq: USAR), the two rare-earth companies Washington has spent hundreds of millions of dollars backing specifically to cut American reliance on Chinese supply. Beijing didn’t flinch at the symbolism. It went straight at the solution.

Worth noting what this listing actually does. It bars Chinese exporters from supplying dual-use goods to the named firms and prohibits any party anywhere from transferring China-origin dual-use materials to them. So the restriction runs in the direction of inputs coming in, not products going out. Both companies say they have already moved substantially away from Chinese-sourced equipment and materials. The immediate operational impact may be limited. The signal is not.

Why rare earths actually matter

Rare earths are the 17 metallic elements that go into everything from fighter jet guidance systems to EV motors to the magnets inside your phone. China controls roughly 60% of global rare earth mining. That number understates the real problem. China controls an estimated 90%+ of rare earth separation and refining output, a share that has remained extremely high even as Western governments push diversification. Mining the ore is one thing. Processing it is another entirely. China owns the whole stack.

Any disruption to supply chains for these materials creates cost pressure across defense, electric vehicles, semiconductors, and advanced manufacturing. That’s not a future risk. That’s the current operating environment.

What both companies are actually building

MP Materials is further along. The company operates the Mountain Pass mine in California, the only active rare earth mine in the United States. In July 2025, MP entered a $400 million public-private partnership with the Department of Defense: a $400M equity investment, a $150 million DoD loan to expand heavy rare earth separation at Mountain Pass, and a 10-year offtake agreement committing the Pentagon to purchase 7,000 metric tonnes per year of NdFeB magnets from MP’s planned 10X facility. As a condition of that deal, MP ceased all sales to China.

That’s the inflection. Not just a mine. A manufacturer with a government customer locked in for a decade.

MP also announced a $500 million long-term supply agreement with Apple in July 2025 to deliver 100% recycled rare earth magnets produced at its Fort Worth, Texas Independence facility, with shipments expected to begin in 2027. The company reported record NdPr production in Q1 2026 and has disclosed revenue of $90.65 million for the quarter. The 10X magnet campus, a 120-acre site in Northlake, Texas sized to fulfill the DoD offtake contract, is targeting groundbreaking in 2026 with $200 million in Texas state incentives secured.

USA Rare Earth is earlier stage. The company commissioned Phase 1a of its Stillwater, Oklahoma magnet manufacturing facility in March 2026 and is positioned to begin fulfilling customer orders through 2026. USAR also operates a metals and alloys business through its Less Common Metals subsidiary. The stock is up roughly 107% year-to-date as of late June 2026, compared to MP’s roughly 7% gain over the same period. Earlier-stage execution risk is real there.

What the market is pricing in

MP shares are trading around $54 as of late June 2026, down from a 52-week high of $100.25 touched in October 2025. According to 18 analysts tracked by S&P Global, the stock carries a Strong Buy consensus with an average 12-month price target of $80.44. Wedbush has an Outperform rating with a $90 target. The stock is sitting roughly 48% below that consensus average right now.

Slight tangent, but worth flagging: the CEO and other insiders have been meaningful sellers over the past few months. Something to weigh alongside the analyst consensus.

The curbs are largely symbolic in the near term for companies that have already localized their supply chains. What matters more is the longer read: the firms designed to reduce US dependence on China are now themselves named targets in the dispute. That changes the political and commercial environment around both stocks in ways that extend well past any single week’s price action.

What to track from here

• MP’s Independence facility magnet sales ramp and timeline toward 2027 Apple shipments
• Groundbreaking and construction progress on the 10X campus in Northlake, Texas
• Pentagon procurement deadlines for domestic rare earth content in defense applications, with a 2027 target to remove Chinese-origin rare earths from defense supply chains
• USA Rare Earth utilization ramp at its Stillwater, Oklahoma facility through 2026
• G7 commitment to cap rare earth and permanent magnet imports from any single country at less than 60% by 2030
• The partial suspension of China’s strictest rare earth export rules, currently set to expire November 10, 2026

The geopolitical headlines around these two names will keep coming. But the underlying story is structural, not cyclical.

Someone has to fill that gap. Right now, there are exactly two publicly traded American companies trying to do it.