BMO analyst George Heppel has noted that the Russia-Ukraine war is expected to account for more than 4% of global germanium demand this year, with an estimated 15 million drones set to be deployed in an environment where China has weaponized critical materials supply chains, given its control of much of the space.
by Tyler Durden
Our coverage of rare earths dates back to President Trump’s first trade war, when we warned that “Rare Earths Are China’s Most Potent Weapon In A Trade War.”
What followed was predictable. During the 2025 trade war, Beijing steadily tightened its control over exports of gallium, germanium, antimony, tungsten and a growing list of other critical industrial metals to the West and its allies. These restrictions represent another weapon in Beijing’s economic-warfare toolkit, aimed squarely at the most vulnerable chokepoints in Western defense, semiconductor and advanced-manufacturing supply chains.
The latest signals suggest that bilateral tensions are once again deteriorating. China was the sole G20 holdout on language addressing trade imbalances and an unsustainable export-oriented economic model, while Treasury has widened its Iran sanctions campaign to include Chinese entities, refiners and shipping networks.
The response from the Trump administration and other Western governments has been to accelerate efforts to restart dormant mines, expand processing capacity and build critical minerals supply chains outside Beijing’s control.
Our coverage of this trade began with an April 2024 note titled “Next Big Mineral Trade Revealed By Morgan Stanley,” which identified MP Materials as one of the miners best positioned to benefit from the Trump-era push to restore domestic critical material supply chains.
By early July 2025, we again highlighted MP Materials as one of the clearest stocks for positioning around this decoupling theme. Just weeks later, shares of the rare earth miner surged from around $30 toward triple-digit territory.
Wall Street may not fully recognize the decoupling theme until regulatory restrictions translate into physical shortages. Some analysts are beginning to understand the grim outlook facing the West. But Beijing does not need to announce a formal trade embargo to shock markets into a crisis. Slowing export approvals, restricting volumes, or denying shipments to select end users have already made it clear that the West must rebuild critical supply chains outside China, either domestically or through friend-shoring.
Another indication that Western critical material supply chains could become a major decoupling theme for Wall Street is the emerging global rearmament cycle.