Why The United States’ Belated Critical Minerals Gambit Won’t Stop China

President Donald Trump has pushed a large-scale federal intervention into the critical minerals and rare-earths sectors since returning to the Oval Office, announcing multiple equity and debt arrangements with dozens of companies and unveiling a $3 billion program to expand domestic capacity. The package includes a $1.4 billion conditional loan from the Pentagon’s Office of Strategic Capital to Sila Nanotechnologies, and industry names such as MP Materials and U.S. Rare Earths have been identified as beneficiaries.

Sila is developing a silicon-carbon composite anode called Titan Silicon that is designed to replace graphite in lithium-ion cells as a "drop-in" material for existing battery manufacturing. The company says the material can raise cell energy density by as much as 40% and began commercial-scale production at a Moses Lake facility in late 2025, with an intended output sufficient to serve batteries for roughly 20,000 to 50,000 electric vehicles each year. Separately, Utah’s Lilac Solutions is promoting a Direct Lithium Extraction (DLE) process for brine that the company says can recover about twice the lithium of traditional methods, cut the time to extract from years to days, and use roughly 99% less land and far less water by eliminating evaporation ponds.

Despite these technology advances and fresh capital, analysts and industry observers warn the U.S. faces a steep climb to reduce reliance on China. Decades of Chinese state support, overseas infrastructure financing and tolerance for heavy environmental costs have produced dominant upstream and downstream capacity: China now accounts for about 60% of global critical minerals mining and more than 90% of refining and processing for materials including rare earths, graphite and gallium. A 2025 outlook report found China is the leading refiner for 19 of 20 key strategic minerals, with an average market share near 70%, and the International Energy Agency reports China produces about 80% of battery cells, over 90% of anode active material and roughly 85% of cathode active material.

Observers quoted in coverage say building comparable scale would take decades and very large sums, while the U.S. has a much shorter window to become competitive. The push is further complicated by recent U.S. policy moves that have reduced incentives for clean-energy investment: the administration’s rollback of Biden-era measures — including elimination of the $7,500 federal EV tax credit and relaxed fuel-economy rules — coincided with a sharp drop in U.S. EV sales, which fell 27% year-over-year in the first quarter of 2026. Those weakened domestic demand dynamics are a concern for companies planning to scale new battery-materials production even as Washington seeks to shore up supply chains.