When books are written about America’s epic trade war with China, the key chapters will be dedicated to semiconductors and rare earth elements (REEs).

These are the two main weapons of this war.

America is steering its semiconductor tank squadron onto the battlefield, while China is loading its rare earth artillery guns.

The U.S. has cut China off from important semiconductors and the tools needed to build them. And China is now choking off the flow of rare earths.

Rare earth elements are necessary for building most modern tech products. Cars, phones, semiconductors, and even military goods like missiles.

And as we know, today China controls the majority of global rare earth mining, refining, and manufacturing.

For decades China has freely supplied the world with cheap REEs and the magnets and other products made with them.

But this wasn’t out of the kindness of the CCP’s heart. It was to build a strategic advantage in an area that’s critical for modern tech.

Now China is utilizing this edge in the trade wars.

Your Rundown for Friday, October 17, 2025...

The American Rare Earth Boom

As China began to seriously limit rare earth exports earlier this year, America has been in “catch-up for 50 years of underinvestment” mode.

As we’ve covered a few times, the Pentagon has now directly invested in a few rare earth deals, most notably MP Materials (MP).

This has caused a massive boom in Western rare earth companies, of which there are only a handful.

Here at Paradigm, our editors nailed the rare earth trade. James Altucher and Enrique Abeyta in particular recommended MP Materials to their members early and did extremely well. MP has risen from $19 at the beginning of this year to $86 today.

But the rare earth trade may be getting a bit ahead of itself. MP currently trades at a $15.9 billion market cap with $242 million of revenue over the past 12 months. The company lost $101 million over that period.

MP has a nice rare earth deposit, and is working on the tech to transform ores into viable tech products. But it does depend on government price floors and investment for its momentum. That valuation isn’t exactly cheap anymore.

And now smaller rare earth plays are getting in on the action, all competing for government cash injections and the stock market boost that will inevitably come with an endorsement from Uncle Sam.

And the government will be investing more. That’s a certainty. America has a lot of catching up to do, and unless we can get to self-sufficiency within a few years, China will continue to use its rare earth dominance as potent leverage in the trade war.

But we should keep in mind that most rare earth plays have little revenue, no profits and will need to overcome major technological hurdles to successfully convert raw rare earth ores into usable products.

We still like the rare earth trade because the government is certainly going to be injecting more cash going forward. But for now, it may have come too far, too fast.

Savvy investors still in this trade may want to consider taking some profits. American rare earth stocks have pulled back a bit from fresh highs earlier this week.

We’ll continue to watch this sector and stocks closely. Our analysts are searching for the best ways to play this sector going forward. Keep an eye on your inbox for updates.

Market Rundown for Friday, October 17, 2025

S&P 500 futures are down 0.05%to 6,665.

Oil is down 0.05% to $57.42 for a barrel of WTI.

Gold’s up 0.05% to $4,309.90 per ounce.

Bitcoin is down 2.35% to $105,570.