MP Materials Corp. (NYSE: MP), the largest U.S. rare-earth producer, saw its stock soar 16.02% in intraday trading on Friday, as President Trump's threat to impose new tariffs on China over its rare-earth controls sparked a rally in Western rare-earth companies. The surge in MP Materials' stock price reflects growing investor interest in non-Chinese rare-earth producers amid escalating trade tensions.
The rare-earth sector has become a focal point in the ongoing U.S.-China trade dispute. China, which dominates global rare-earth production and processing, has previously hinted at using its market position as leverage in trade negotiations. In response, the U.S. government has been actively supporting domestic rare-earth production, with the Pentagon reportedly making its largest-ever investment in the sector through a deal with MP Materials earlier this year.
The surge in MP Materials' stock was part of a broader rally in rare-earth stocks. Other companies in the sector also saw significant gains, with some stocks rising by as much as 18%. This investor enthusiasm underscores the strategic importance of rare-earth elements, which are critical components in various high-tech and military applications, including electric vehicles and jet fighters. As the trade tensions continue to simmer, Western rare-earth producers may stand to benefit from increased government support and investor interest in securing non-Chinese sources of these crucial materials.
