Washington faces a growing strategic vulnerability as Beijing’s control over critical minerals threatens submarine production, military supply chains and the industrial foundations of American naval power.
As November 10 approaches, an important question is confronting America’s strategic establishment: How will Washington preserve its naval supremacy when China has the ability to disrupt the supply chains needed to build the submarines that underpin American military power?
The date matters because it marks the scheduled expiration of a temporary suspension of key Chinese rare-earth export restrictions agreed upon following a meeting between US President Donald Trump and Chinese President Xi Jinping in Busan, South Korea, on October 30, 2025.
The arrangement, widely described as the ‘Busan truce’, provided Washington with temporary relief from some of Beijing’s most extensive export-control measures. But it did not dismantle China’s broader export-control framework. With the suspension approaching its deadline, uncertainty is returning to American defence and industrial supply chains.
The issue extends far beyond trade. Developments in the Middle East and the South China Sea have once again demonstrated the strategic importance of maritime power. Control of shipping routes, protection of energy supplies, deterrence of adversaries and the ability to project military force across oceans remain central to America’s global position. Submarines are among the most important instruments supporting that position.
US President Donald Trump has made rebuilding American naval strength and restoring the country’s shipbuilding capacity a priority. His administration has pledged to expand the naval industrial base, address chronic construction delays and strengthen submarine production and maintenance capabilities.
Defence Secretary Pete Hegseth has repeatedly emphasised the need for ‘more ships, more subs’.
However, Washington faces an uncomfortable contradiction. While the United States wants to accelerate submarine construction to counter China’s expanding maritime capabilities, producing these sophisticated vessels requires specialised materials, including high-performance rare-earth magnets, whose global supply chains remain heavily dependent on China.
A recent analysis published in the US Naval Institute’s Proceedings highlights the vulnerability of American submarine production to Chinese control over critical mineral supply chains.
American submarine motors, actuators and sensors depend on specialised rare-earth magnets, particularly neodymium-iron-boron (NdFeB) and samarium-cobalt (SmCo) varieties. These materials are essential for several advanced electrical, propulsion and sensing systems.
China’s advantage does not simply come from possessing rare-earth deposits. Its dominance extends across separation, refining, processing and magnet manufacturing. This industrial concentration gives Beijing considerable influence over the availability of materials required by advanced manufacturing and defence industries.
Over several years, China has progressively developed an export-control system covering strategically important minerals and associated technologies.
In August 2023, Beijing introduced licensing requirements for exports of gallium and germanium, two materials widely used in semiconductor manufacturing, advanced electronics and defence applications. China accounted for approximately 94 per cent of global primary low-purity gallium production and 83 per cent of refined germanium production, giving it substantial influence over international supplies.
In December 2023, Beijing tightened its grip further by restricting exports of technologies used to extract, separate and process rare earths. The decision targeted an important part of the global supply chain: the industrial expertise required to transform raw minerals into usable materials.
The restrictions subsequently became more directly connected to the US-China strategic competition.
In December 2024, China prohibited exports of gallium, germanium, antimony and certain super-hard materials to the United States.
In April 2025, Beijing expanded licensing requirements to seven medium and heavy rare-earth elements: samarium, gadolinium, terbium, dysprosium, lutetium, scandium and yttrium, along with associated permanent magnets.
The measures created uncertainty for manufacturers dependent on Chinese supplies, with companies facing additional licensing procedures, potential delays and higher procurement costs.
In October 2025, China announced an even broader package of export controls covering additional rare-earth and battery-related materials. Particularly significant was a proposed extraterritorial provision that could bring certain foreign-made products containing Chinese-origin rare-earth materials within Beijing’s licensing jurisdiction.
Such a measure threatened to extend China’s regulatory influence beyond its borders, potentially affecting international manufacturers even when their products were assembled outside China.
The consequences extended across several industries. Rare-earth prices increased sharply, while manufacturers in Europe and elsewhere encountered difficulties securing supplies and export permissions.
The automobile industry was particularly exposed because permanent magnets made from rare earths are widely used in electric motors and other industrial applications. Ford temporarily halted some production in 2025 amid supply-chain difficulties, illustrating how restrictions on relatively specialised materials can disrupt major manufacturing operations.
Even after Washington and Beijing reached an understanding, supply conditions did not immediately return to normal. Reduced availability and higher prices continued to affect manufacturers.
The October 30, 2025, meeting between Trump and Xi in Busan produced a temporary accommodation.
Under the arrangement, Beijing agreed to suspend key elements of its October export-control package until November 10, 2026. It also suspended US-specific restrictions on gallium and germanium until November 27, 2026.
But suspension is not the same as dismantling.
China retained its broader export-control architecture and did not comprehensively withdraw the licensing requirements introduced in April 2025 for seven medium and heavy rare-earth elements.
Consequently, the United States secured temporary relief rather than a permanent resolution.
As November 10 approaches, Washington must assess whether Beijing will extend the suspension or allow the October restrictions to take effect again. The November 27 deadline presents a second uncertainty concerning gallium and germanium.
For China, these restrictions also provide bargaining leverage in negotiations with Washington. For the United States, the issue has become a question of national security and industrial resilience rather than simply international trade.
The vulnerability extends well beyond submarines. Advanced American military platforms, including F-35 fighter aircraft, Tomahawk missiles and Predator unmanned aerial vehicles, also depend on rare-earth materials and associated specialised components.
Submarines, however, present a particularly important case because of their sophisticated propulsion, electrical and sensor systems.
Estimates suggest that a Virginia-class nuclear-powered attack submarine may require approximately 9,200 pounds, or around 4.2 tonnes, of rare-earth materials. Although estimates vary depending on which components and material categories are included, the scale illustrates the importance of secure mineral supplies.
Rare earths perform several critical functions in advanced submarine systems.
First, they support high-performance electric motors and propulsion technologies. Neodymium-iron-boron magnets are among the strongest commercially available permanent magnets. They provide high magnetic strength relative to their size and weight, making them valuable in compact, powerful electrical systems.
Dysprosium and terbium can improve the high-temperature performance of these magnets, an important requirement in demanding military applications.
For submarines, acoustic performance is particularly important. Their ability to operate quietly is central to avoiding detection and maintaining operational effectiveness. Advanced propulsion and electrical technologies therefore depend on materials that can deliver reliable performance under demanding conditions.
Second, samarium-cobalt magnets offer high-temperature stability and resistance to demagnetisation. These characteristics make them useful in specialised motors, actuators and other systems operating in demanding environments, including certain naval applications.
Third, rare earths contribute to advanced alloys, coatings and other specialised materials. Their properties can improve heat resistance, magnetic performance and material durability in military equipment.
Together, these applications make rare-earth supply chains an important consideration in the production and maintenance of modern naval platforms.
China’s mineral leverage comes at a particularly difficult moment for the US Navy.
The United States continues to operate the world’s largest nuclear-powered submarine fleet, but its shipbuilding industry is struggling to deliver new vessels at the pace required by the Navy.
The United States produces approximately 1.1 to 1.3 submarines annually, according to estimates cited in defence analyses, while China’s submarine-building capacity is considerably larger.
The disparity is important because Washington is attempting to maintain its existing fleet while simultaneously expanding its capacity to meet growing strategic demands in the Indo-Pacific.
The US Navy has paid for two Virginia-class attack submarines and one Columbia-class ballistic-missile submarine that have faced substantial delivery delays. Construction bottlenecks, workforce shortages, supplier difficulties and maintenance backlogs have affected the wider industrial base.
Admiral Daryl Caudle told Congress in May 2026 that the Navy would not be positioned to receive at least two submarines annually until 2032.
The maintenance situation adds another complication. A significant proportion of the American attack submarine fleet is undergoing maintenance or awaiting scheduled maintenance, reducing the number of vessels immediately available for operations.
The Columbia-class programme, designed to replace the ageing Ohio-class ballistic-missile submarines, is also facing schedule pressures. The first vessel is currently expected to enter the water in 2028.
Meanwhile, China continues expanding its naval capabilities. Its nuclear-powered fleet includes Shang-class Type 093 attack submarines and Jin-class Type 094 ballistic-missile submarines. Beijing is also expanding conventional submarine production and investing in shipbuilding infrastructure.
Although estimates of China’s operational nuclear submarine numbers vary, its growing industrial capacity has become a central concern for American defence planners.The consequences are not limited to the United States.
Britain’s Dreadnought-class ballistic-missile submarine programme and Australia’s future SSN-AUKUS nuclear-powered attack submarines also depend on interconnected defence supply chains involving American and allied suppliers.
Their requirements include specialised steel, propulsion components, advanced electronics and high-performance magnets.
A disruption in the availability of critical materials could therefore affect multiple defence programmes across the United States, Britain and Australia.
The International Energy Agency has also warned about the economic risks associated with concentrated critical-mineral supply chains. Its analysis highlights the exposure of downstream industries outside China, including major manufacturing economies in the United States and Europe.
Japan provides another example. Following tensions over Taiwan and its broader relations with Beijing, Japanese manufacturers have faced concerns about access to Chinese rare-earth supplies, particularly dysprosium and terbium, which are important for high-performance magnets.
The potential consequences extend to Japanese automobile manufacturers and defence contractors.
The United States and its partners are attempting to develop alternative sources of rare-earth materials, processing capacity and permanent magnets.
The Pentagon has supported domestic rare-earth processing initiatives, including projects associated with expanding the capabilities of the Mountain Pass operation in California and developing additional capacity in Texas.
Washington has also signed a $96 million, four-year agreement with Australian producer Lynas Rare Earths to secure supplies of light and heavy rare-earth oxides.
At the same time, American companies are attempting to establish a domestic permanent-magnet manufacturing industry.
USA Rare Earth, E-VAC and Noveon Magnetics are among the companies involved in efforts to develop a more complete American supply chain, with ambitions to expand commercial production by 2027.
Japan and Germany are also pursuing alternative manufacturing capabilities. Companies including Proterial, formerly Hitachi Metals, and Germany’s Vacuumschmelze possess specialised magnet technologies and are exploring opportunities to strengthen production outside China.
However, establishing alternative supply chains will take time.
Many proposed projects still depend on Chinese-origin materials, processing expertise or intermediate products. China’s restrictions on exporting rare-earth separation and processing technologies also complicate efforts to establish competing facilities.
The International Energy Agency has warned that even with announced projects, non-Chinese magnet production could remain below 20 per cent of non-Chinese demand in 2035.
Defence manufacturing presents an additional challenge because materials and components must undergo stringent testing and qualification procedures before being incorporated into military platforms. New suppliers cannot immediately replace established sources.
The strategic problem facing Washington is therefore twofold: it must expand submarine production while simultaneously rebuilding the industrial supply chains required to support that expansion.
As November 10 approaches, the rare-earth dispute has become a test of America’s ability to sustain its military-industrial strength in an era of intensifying competition with China.
Beijing does not necessarily need to defeat the US Navy in a direct naval confrontation to create strategic difficulties for Washington. Its control over critical minerals, processing technologies and specialised manufacturing inputs gives it the potential to disrupt the industrial foundations on which American naval power depends.
The question is no longer simply how many submarines the United States can afford to build. It is whether it can secure the materials, technologies and manufacturing capacity needed to put those submarines into the water.
For American naval supremacy, the battle may begin long before a submarine reaches the sea.
