Gadolinium, neodymium and europium — these and other rare earths are used to make magnets and lasers and sensors and motors for electric cars. At the end of the Cold War, the U.S. government had a massive stockpile of $42 billion worth of them and other critical minerals.

“After 1990 and the collapse of the Soviet Union, we sold down the vast majority of the defense stockpile,” said Heidi Crebo-Rediker, a senior fellow with the Council on Foreign Relations. 

From $42 billion worth of minerals in 1990, the stockpile shrank to less than $1 billion by 2023, she said. Meanwhile, today’s private businesses — especially auto parts suppliers — are running down their own much smaller reserves.

“Back in April, we started creating a ticking clock,” said Gracelin Baskaran, director of the critical minerals security program at the Center for Strategic and International Studies. 

April is when China, in retaliation for Trump’s “liberation day” tariffs, shut down exports of certain rare earth minerals. 

Seven are called “heavy rare earths,” said Baskaran. These include dysprosium, lutetium and terbium — all minerals where China’s dominance in processing, and separating them is almost absolute. It’s the only game in town.

“China currently separates 100%. There’s not a viable alternate supply,” Baskaran said. “We will run out.”

Some European makers of auto parts have already stopped output and shut down production lines. Carmakers in India and Japan have warned of the same. Mercedes Benz said it was trying to build up its stockpiles. 

In the U.S., auto suppliers have been aggressively stockpiling for a while, said Alan Baum with automotive market research firm Baum and Associates.

“Typically, the larger buyers of these materials have more influence on getting their volume than the small ones,” he said.

Other options include moving car part manufacturing to China despite tariffs or just slowing down the push for electric vehicles. 

The Trump administration has made securing and processing critical minerals like rare earths a centerpiece of foreign policy, pursuing deals with the Democratic Republic of Congo and Saudi Arabia most recently. But meanwhile at home, the GOP tax bill would end a tax credit for domestic production — even as that production starts to ramp up.