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The United States has intensified efforts to reduce reliance on China for rare earth minerals—its primary supplier—by signing agreements with Malaysia and Thailand on Sunday, including one that experts believe could yield quick results.
The memoranda of understanding (MOUs) with Malaysia and Thailand aim to boost exports of critical minerals to American manufacturers in the automotive, defense, and high-tech sectors, following a US$8.5 billion US-Australia framework deal announced earlier this month.
However, analysts say these agreements will require industry support and time to develop processing capacities before large volumes of raw materials are available to US buyers. Charles Chang, a finance professor at Fudan University, noted that while progress may take time, the accords could help lessen US dependence on China amid ongoing trade disputes, which Beijing has responded to by restricting mineral exports.
China currently dominates about 70% of global rare earth mining and 90% of processing, according to the Center for Strategic and International Studies, a US think tank. US electric vehicle manufacturers, for example, rely heavily on these materials. Industry expert Jon Hykawy commented that securing supply agreements with Malaysia and Thailand, along with establishing downstream processing, could be beneficial for the US in the long run.
Chen Zhiwu, chair professor of finance at the University of Hong Kong, added that such strategies serve as hedges against future restrictions from China, which currently maintains the most stable and cost-effective supply chain for rare earths.
Earlier this month, China expanded export controls on rare earth materials and related technologies amid ongoing trade tensions with the US. Still, the recent talks in Kuala Lumpur and an anticipated meeting between US and Chinese leaders could relax some restrictions, according to US Treasury Secretary Scott Bessent.
Changing US alliances might strengthen Washington’s bargaining position with Beijing, Chang suggested, as the agreements aim to lessen China’s negotiating leverage in critical mineral trade.
Meanwhile, US President Donald Trump and Thai Prime Minister Anutin Charnvirakul signed an MOU to diversify and secure critical mineral supplies while promoting cooperation between US and Thai companies to bolster supply chain resilience. Similarly, the US and Malaysia reached an agreement to enhance trade and investment in critical mineral exploration, extraction, processing, and refining.
Malaysia, unlike many other countries, is considered capable of quickly scaling up its industry due to existing processing capacity, with the government advocating for “fast-tracking” the sector’s development.
These US agreements were announced during Trump’s participation at the 2025 ASEAN summit in Kuala Lumpur.