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Trump’s Rare Earth Obsession

🤝 Why Donald Trump is so obsessed with rare earth metals in trade negotiations, and how China monopolized the industry.

Author

Ankit Sinha
June 17, 2025

Silver banana goes to…




In this issue of the peel:

  • ✈️ The S&P and the NASDAQ surged as Iran announced it wants to initiate peace talks.

  • 🛢️ Oil prices sink as a result of Iran’s pursuit of de-escalation.

  • 🤝 Why Donald Trump is so obsessed with rare earth metals in trade negotiations, and how China monopolized the industry.

Market Snapshot

Student Spotlight

A+ Equity Research Report 📊

Looking for a stellar example of what makes an equity research report stand out?

One of our WSO Academy students, Nick Pliszak, put together an impressive deep dive on Northrop Grumman, covering valuation, catalysts, and key risks with the kind of insight that turns good pitches into great ones. Check out the report here.

The Daily Poll

Should rare earths be America’s top trade priority?

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Yes: 24.6% // Depends: 14.2% // Stay neutral: 56.3% // Not sure: 4.9%

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Macro Monkey Says

Markets Rise as Iran Eyes Peace

After markets sank on Friday due to tensions between Iran and Israel boiling over, Iran announced yesterday that they want to start de-escalation talks. Iran announced that they would resume nuclear program talks with the U.S. as long as they didn’t join Israel in attacking Iran. 

Although tensions seem to be easing between the two Middle Eastern countries, it is worth noting that both sides have fired countless ballistic missiles over the past 24 hours. While the conflict is definitely not over, the potential peace talks represent an unlikely chance that this will become a larger conflict. 

Oil prices also sank as a result of Iran’s de-escalation efforts, despite numerous Israeli attacks on Iranian oil fields in the past few days. For example, Israel attacked the South Pars gas field, halting all production of oil there.

This was also following Israeli attacks on Iranian nuclear sites, killing many top Iranian military leaders. Despite this, Iranian exporting infrastructure has remained mostly intact, and the Strait of Hormuz, a critical piece of land for Iranian oil exports, has remained untouched. 

Something else to keep in mind is that Israel said it would continue to launch strikes directed towards Iran despite Iranian efforts at de-escalation. Additionally, Donald Trump had to reject Israel’s proposal to assassinate Iran’s supreme leader, echoing Israel’s relentless attitude. 

The Takeaway?

If progress is made between Israel and Iran, then there will likely be no long-term effects on crude oil pricing and the overall market. Unfortunately, due to Israel’s extreme aggression, the question of peace is still one that is to be determined. 

Career Corner

Question

I was wondering if interviewers for IB internships ask questions about Excel. Do we need to be proficient in Excel and know how to build models or DCFs in Excel for job interviews?

Answer

Unlikely you'll get a question about Excel specifically.

Head Mentor, WSO Academy

What's Ripe

EchoStar Corporation (SATS) 49.1% 

  • EchoStar, a satellite communications company, saw incredible gains today due to Donald Trump urging the chairman of the FCC and the chairman of EchoStar to resolve their dispute regarding spectrum licenses for EchoStar’s satellites.

  • For a little context, EchoStar was under investigation by the FCC (Federal Communications Commission) for failure to meet “spectrum buildout requirements” for their satellites. 

Advanced Micro Devices (AMD) 8.81% 

  • AMD, a massive semiconductor producer, witnessed a surge in its stock price as Piper Sandler upgraded their target price from $125 to $140. Piper Sandler also maintained an overweight rating for AMD, as the overall market currently has quite a bullish outlook on tech stocks. 

What's Rotten

Sarepta Therapeutics (SRPT) 42.1%

  • If you owned this stock, you probably had a bad day yesterday. Sarepta Therapeutics is a biopharma company that specializes in RNA and gene therapeutics, mostly for rare muscular diseases. 

  • While they likely held good intentions, a patient who was undergoing Sarepta’s muscular dystrophy therapy suffered from acute liver failure and died. Several banks significantly downgraded their price target as a result of this. 

Mercury Systems Inc. (MRCY) 6.5%

  • Mercury Systems is a technology company specializing in solutions for aerospace and defense companies. Mercury’s stock price plummeted today as a result of mixed analyst ratings due to its robust recent performance, leading to speculation of overvaluation. Banks like JP Morgan and Truist are maintaining a neutral/hold rating, convincing some investors to sell. 

Thought Banana

Why Trump’s Trade Plan Hinges on Rare Earths

Last week, when the U.S. and China were having trade talks in London, one of America’s primary goals was to have some kind of deal regarding rare earth metals, which China has monopolized. In the trade deal between the U.S. and China, China agreed to supply rare earth metals to U.S. companies. 

But why are rare earth metals so important to the Trump Administration? Rare earth metals are arguably the most critical raw materials on the planet. They are essential for many modern technologies, such as semiconductors (which are used in a vast array of technological devices), MRIs, and cancer treatments. 

While the U.S. was the top exporter of rare earth metals from the 1960s to the 1980s, China has since monopolized the industry. 

China monopolized the industry by scaling up their operations of rare earths (mainly through cheap labor), allowing them to flood the market with cheap rare earth metals, therefore establishing a monopoly over time. 

China also utilized its monopoly on rare earths when Donald Trump imposed his towering Liberation Day tariffs. In retaliation for Trump’s tariffs, China threatened to limit the exportation of rare earth metals to the U.S., which could have severe macroeconomic implications for the U.S.

Furthermore, rare earth metals are not only required for technology, but they are also required for industrial items, such as the U.S. Air Force's F-35 jet. A singular F-35 fighter jet requires over 900 pounds of rare earth metals, says the U.S. Department of Defense. 

China’s monopoly over rare earth metals is also a primary reason the Trump Administration wants to bring manufacturing back to the U.S., to avoid economic reliance on other countries. This also explains the Trump Administration’s deal with Nippon Steel to acquire U.S. steel- in an effort to localize the production of steel. 

While steel is not a rare earth metal, it is still quite important and widely considered the backbone of industrial development. The newly acquired company is also set to invest $11 billion of capital by 2028 in order for the U.S. to become a domestic producer of steel.

The Takeaway?

While China’s monopoly on rare earth metals poses somewhat of a threat to the U.S. economy because of the sheer amount of products rare earth metals are used in, America’s deal with China to export rare earths to the U.S. is a step in the right direction. Furthermore, while bringing manufacturing back to the U.S. may be more of a long-term goal, Nippon’s acquisition of U.S. Steel is seemingly a step towards that lofty goal. 

The Big Question: Can the U.S. really break free from China’s grip on rare earths, or is it too late to mine its way out?

Banana Brain Teaser

Previous

In a small snack shop, the average revenue was $400 per day over a period of 10 days. During this period, if the average daily revenue was #360 for the first 6 days, what was the average daily revenue for the last 4 days?

Answer: $460

Today

Of the 150 houses in a certain development, 60% have air-conditioning, 50% have a sunporch, and 30% have a swimming pool. If 5 of the houses have all 3 of these amenities and 5 have none of them, how many of the houses have exactly 2 of these amenities?

Send your guesses to [email protected]

❝

Buy not on optimism, but on arithmetic.

Benjamin Graham

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Happy Investing,
Chris, Vyom, Ankit, Mithun, Colin & Patrick