China is poking the bear by hitting the two companies Trump is counting on to break free from Beijing

China escalated its trade fight with Washington on Monday, adding MP Materials and USA Rare Earth — the two companies the Trump administration is banking on to wean the U.S. off Chinese rare earths — to its export control list. Beijing's Commerce Ministry framed the move as retaliation after the U.S. expanded its own roster of Chinese firms tied to the military earlier this month, and it swept up eight other American companies, including drone-motor maker Aveox.

The listing bars Chinese exporters from shipping "dual-use" goods — products with both civilian and military applications — to the named firms, and prohibits anyone in any country from passing Chinese-origin dual-use items along to them. That's a real threat in a market China owns: it processes roughly 90% of the world's rare earths and makes about 93% of the magnets built from them — the small but powerful components inside everything from EV motors to F-35 fighter jets.

Here's the twist: the blow may land softer than it looks. MP Materials, which got a $500 million commitment from Apple last year and $400 million in backing from the Pentagon to become its largest shareholder, stopped shipping concentrate to China back in April 2025. Bloomberg described Monday's curbs as largely symbolic, and shares of both companies barely budged. Still, China is preparing even tighter global export rules for November, a reminder that the leverage runs deep. For investors weighing the sector, our guide to rare earth stocks breaks down the major players.

MP, for its part, has long said it saw this coming. "We have been preparing for this moment since day one," the company wrote when it cut off China last spring.