On July 30, 2026, President Trump signed a Presidential Determination invoking Section 101 of the Defense Production Act to give Commerce Department authority to restrict exports of black mass, rare-earth permanent magnets, and tungsten scrap. It was the first use of this Korean War-era statute for critical mineral export control, and it closed a gap that had allowed recoverable strategic materials to flow freely to foreign processors, primarily in China, for years. The implementing rule took effect August 27. The industry is still catching its breath.
Introduction
The tungsten drill bit does not look like a national security asset. It arrives at a machine shop in Toledo or Tulsa in a standard industrial case, does its work cutting steel or shaping aerospace components, and eventually wears down to something too dull to be useful. At that point, for the better part of a decade, it would have been collected by a recycler, crushed or chemically dissolved into a powder called swarf, and loaded into a shipping container bound for a processing facility in Jiangxi or Hunan province. The economics were simple: China had the refining infrastructure, the scale, and the appetite. America had the scrap.
On the morning of July 30, 2026, that arrangement acquired a legal complication it had never previously faced. President Trump signed Presidential Determination No. 2026-19, a document running to fewer than four pages in the Federal Register, invoking Section 101 of the Defense Production Act of 1950 and delegating to Commerce Secretary Howard Lutnick the authority to restrict exports of recoverable critical minerals and materials. The list of covered substances reads like an inventory of America's secondary-market vulnerabilities: black mass from crushed lithium-ion batteries, end-of-life rare-earth permanent magnets, manufacturing swarf, tungsten waste and scrap. Seven days later, the Bureau of Industry and Security published a Temporary Final Rule that translated that authority into a concrete prohibition. By August 27, anyone in the United States selling black mass or tungsten scrap had to direct one hundred percent of their monthly sales to U.S. persons, unless they obtained an advance exception from BIS.
The speed of the sequence, two business days between the Presidential Determination and the pre-publication copy of the implementing rule, struck legal observers as highly irregular, a phrase that appears in at least three law firm client advisories reviewing the action. The APA's standard notice-and-comment requirements were bypassed on the grounds that urgent and compelling circumstances made prior public input impracticable. No allocation order restricting exports had been issued by the Commerce Department since the end of the Cold War. Washington had just invented a new instrument for critical mineral supply chain policy, assembled from a 1950 statute, a 2012 executive order, and a determination that America had been quietly exporting its own strategic reserves one shipping container at a time.
The Gap That Nobody Closed
To understand why the July 30 determination matters, it helps to understand what the existing export control architecture was never designed to catch. The Export Administration Regulations, the primary mechanism through which BIS governs what American companies can send abroad and to whom, are built around finished goods and technologies. They were constructed to prevent adversaries from acquiring advanced semiconductors, missile guidance systems, or dual-use chemical precursors. Nobody, when those frameworks were being written or updated, was thinking about the back end of the battery supply chain.
Black mass is the product of shredding a spent lithium-ion battery. It is a dark, granular material containing lithium, cobalt, nickel, manganese, and graphite, all of the cathode and anode chemistry that made the battery valuable in the first place. It is not a finished product. It is not a technology. Under the prior regulatory framework, it occupied an ambiguous middle category: too processed to be raw ore, too unrefined to trigger most export license requirements. American recyclers could sell it to whomever would pay, and the buyers who paid best were almost invariably in Asia.
The same logic applied to tungsten swarf and end-of-life rare-earth permanent magnets. These materials contain dysprosium, terbium, neodymium, and other elements that appear on every critical minerals list the U.S. government has published in the past decade. They exit American factories and defense facilities as waste, pass through a recycler's hands, and reenter the global supply chain as Chinese-processed output. The United States was, in effect, exporting the feedstock for its own supply chain vulnerabilities.
The gap had been visible for years. A bipartisan group of House members, led by representatives from the Select Committee on China including Chairman John Moolenaar of Michigan, had introduced legislation to amend the Export Control Reform Act to require licenses for black mass and swarf exports to foreign adversaries. That bill moved slowly through committee. The Presidential Determination moved in seven days. The gap did not survive the urgency the administration was willing to bring to closing it.
A Korean War Statute Finds New Purpose
The Defense Production Act has a specific institutional memory embedded in its architecture. Harry Truman signed it in September 1950, three months after North Korean forces crossed the 38th parallel, drawing on the wartime precedents of the First and Second War Powers Acts of 1941 and 1942. The original purpose was to ensure that American factories could be directed toward military production when the nation needed it, commandeering civilian industrial capacity the way a general commandeers high ground. Allocation authority, the specific power invoked on July 30, traces directly to the controlled materials programs of World War II, when the federal government managed the distribution of steel, copper, and aluminum to maximize war production.
Congress has expanded the statute's definition of national defense considerably in the intervening seventy-six years. The DPA now covers domestic preparedness, responses to natural hazards, and emergency supply chain management well beyond its original military framing. Presidents have invoked it to compel vaccine production, address semiconductor shortages, and direct energy companies during crises. But the allocation authority, the specific Section 101 power that gives the executive branch the right to order who a seller's output must go to, had not been used in an export-restriction context since the Cold War's end. In that sense, what BIS published on August 6 was genuinely without modern precedent.
The legal chain runs from Section 101 through Executive Order 13603, signed by President Obama in 2012 to update DPA implementing procedures, through the July 30 Presidential Determination, and finally to BIS's Temporary Final Rule. The mechanism at the end of that chain is a domestic sales requirement rather than a traditional export license regime. It does not ban exports outright; it requires that one hundred percent of monthly sales of covered materials go to U.S. persons, and it permits exports only through an advance adjustment or exception process. The effect is similar to a ban, but the legal architecture is different, and that difference may matter for both enforcement and future litigation.
The parallel is worth noting carefully. Copper scrap was explicitly excluded from the July 30 determination, because it was already covered by Proclamation 10962, signed exactly one year earlier, which carried an identical Section 101(b) finding for copper. The copper carve-out signals that the administration is building this framework mineral by mineral, proclamation by proclamation, with each action citing the prior one as precedent. The structure is modular. BIS itself flagged in the August 6 rule that it may issue additional allocation orders for other recoverable critical minerals and materials as required to meet national defense objectives. The door is open; the question is how many materials will eventually walk through it.
Tungsten's Hard Arithmetic
Of the materials covered by the August 6 Temporary Final Rule, tungsten presents the starkest numbers. The United States has had no commercial tungsten mining since 2015, when its last domestic mine closed. Between 2019 and 2022, twenty-seven percent of U.S. tungsten imports came from China; globally, China produces roughly eighty-three percent of the world's tungsten output, some 63,000 of the approximately 78,000 metric tons mined in 2023. When Beijing imposed export curbs on tungsten in February 2025, the price of ammonium paratungstate, the industry's key traded form of the metal, approximately doubled within twelve months.
Against that backdrop, the USGS estimates that approximately 4,700 tons of contained tungsten left the United States in 2025 in the form of waste, scrap, and secondary materials. That figure includes cemented-carbide cutting tools, drill bits, mining and oil-and-gas equipment, high-speed steel scrap, electrical contacts, and end-of-life defense and aerospace components. The United States was, in the language that Washington has adopted for this debate, exporting its own strategic stockpile piece by piece, unintentionally and legally.
Chairman Moolenaar, who has been among the most active congressional voices on the secondary materials loophole, framed the problem in testimony earlier this year with the observation that tungsten is an essential input in armor-piercing munitions, aerospace components, and advanced electronics, for which there is currently no domestic production. The point is not merely rhetorical. As I reported in August covering the State Department minerals roundtable, the Trump administration has explicitly linked supply chain security to the replenishment of weapons stockpiles depleted during the U.S. conflict with Iran. Tungsten is not an abstraction in that context; it is an ingredient in the ammunition the Pentagon is trying to rebuild.
The August 27 effective date gave recyclers and industrial scrap dealers little time to restructure existing contracts. Law firms advising clients noted that companies not properly prepared for the restrictions risk having export shipments detained by Customs and Border Protection, which is assisting BIS with enforcement. The compliance window was narrow; the consequences of missing it were real.
Black Mass and the Refining Capacity Problem
If tungsten's arithmetic is stark, black mass presents a more complicated industrial policy puzzle. The market for battery recycling has expanded rapidly as electric vehicle adoption has grown, but the infrastructure to convert black mass, the shredded output of spent lithium-ion cells, into battery-grade cathode material is concentrated almost entirely in Asia. South Korea, Japan, and China have invested heavily in hydrometallurgical and pyrometallurgical refining facilities. The United States has invested considerably less.
The Union of Concerned Scientists, in an assessment of the BIS rule, noted that while the ban can help build up the United States black mass recycling industry in the long term, research demonstrates that there is currently an undercapacity. Without reconsidering the timeline and pairing it with complementary recycling requirements, the organization argued, the rule does not do much to increase domestic recovery of minerals from the waste stream. The criticism is pointed: locking material inside U.S. borders is not the same as building the refining capacity to do something useful with it.
BIS appears to have anticipated at least part of this objection. The adjustment and exception process includes an explicit provision for situations where black mass will be exported for refining with the refined material returned to the United States, a so-called processing-and-return exemption that mirrors arrangements used in other sectors where domestic processing capacity is insufficient. Companies can apply for adjustments on a rolling basis through August 27, 2027, and BIS has committed to responding within fourteen business days. Whether that process will be fast enough and flexible enough to prevent material from simply accumulating in domestic warehouses is a question the industry is watching closely.
Green Li-ion, one of the few U.S.-based companies with meaningful black mass processing capability, noted publicly that the rule shifts market dynamics materially in favor of domestic buyers. With a limited pool of U.S.-domiciled purchasers who can convert black mass into finished battery-grade output, the demand-supply balance has moved in ways that may compress margins for recyclers who previously relied on competitive international markets to set their prices. The Automotive Recyclers Association expressed broader support for the policy's circular economy objectives while noting the industry's leading role in recovering critical minerals from end-of-life vehicles. The politics of the rule are favorable; the near-term economics are more complicated.
A Legislature Moving in the Same Direction
The Presidential Determination did not arrive in a congressional vacuum. The House Select Committee on China and the House Foreign Affairs Committee have been working in parallel toward the same destination, using different legal instruments. In April 2026, the House Foreign Affairs Committee marked up fifteen export control bills in a single session, with Chairman Brian Mast of Florida describing the package as an effort to close loopholes exploited by China and strengthen BIS enforcement. Chairman Moolenaar, who chairs the Select Committee on China, called bipartisan passage of the package a critical step toward strengthening America's technological edge.
Separately, legislation to amend the Export Control Reform Act specifically to require licenses for black mass and swarf exports to foreign adversaries has moved through committee with bipartisan support. The bills' stated purpose includes facilitating resilient critical mineral supply chains, promoting domestic processing and recycling, and limiting what sponsors describe as predatory price inflation by China in secondary materials markets. The legislative track and the executive track are aimed at the same policy outcome through mechanisms that would be mutually reinforcing if both reach completion.
The House Energy and Commerce Committee held a hearing in June 2026 titled Trash to Treasure, examining seven bills focused on reducing barriers to domestic critical mineral recovery and recycling. The session covered everything from EPA's role in interagency minerals recovery efforts to the remediation of contaminated sites as potential secondary mineral sources. Seven distinct pieces of legislation working through the House simultaneously, alongside an executive action that bypassed the legislative process entirely, speaks to the degree of institutional convergence behind this issue.
That convergence is significant because it addresses the durability question that hangs over any executive action taken under an emergency statutory authority. Presidential Determinations under the DPA can be modified, rescinded, or allowed to expire. The BIS Temporary Final Rule is explicitly time-limited, set to expire August 27, 2027, unless extended. If Congress simultaneously amends the Export Control Reform Act to require licenses for these materials, the restriction becomes embedded in a statutory framework that does not depend on presidential will for its continuation. The administration appears to be using the DPA as a bridge to a more durable legislative destination.
The Architecture of What Comes Next
Standing in a recycling facility in the months before the August 27 effective date, one could watch forklifts moving pallets of spent EV battery modules toward shredders, the black mass dropping into lined containers, and picture the long supply chain that had, until very recently, carried that material to Jiangxi province for processing. The facility's commercial team was still working through what the BIS rule meant for existing customer contracts, some of which were with Asian trading companies that would now require an advance adjustment or exception from the Bureau to fulfill.
The broader picture being assembled in Washington simultaneously was one of interlocking policy instruments designed to address the same underlying vulnerability from multiple directions at once. The FORGE architecture and Project Vault, which I covered at length in August, are meant to build allied supply chains capable of replacing Chinese processing capacity over the medium term. The Section 232 investigation into processed critical mineral imports is generating the data and legal basis for potential tariffs. The DPA allocation authority, applied now to recoverable materials, closes the secondary-market gap that none of the other instruments addressed. Together, they represent something more coherent than any single measure would suggest in isolation.
Nevertheless, the uncomfortable arithmetic of domestic refining capacity remains. The USGS 2026 Mineral Commodity Summaries document that the United States is fully import-reliant for eleven of thirty-seven listed critical minerals, with no domestic production at all, and more than fifty percent import-reliant for the majority of the others. Rare earth import reliance from China stood at seventy-one percent of total imports between 2021 and 2025, even as successive administrations called for diversification. China, as Senator Todd Young of Indiana noted in July 2025, controls roughly eighty-five percent of global processing capacity for these materials. Locking black mass and tungsten scrap inside U.S. borders changes the geography of the secondary market. It does not, by itself, build the facilities needed to turn those materials into something the defense industrial base can use.
The comment period on the BIS framework closes November 4, 2026. That date is six days before the expiration of the U.S.-China critical minerals truce, the one-year suspension of Beijing's sweeping October 2025 export controls whose precarious final weeks I have been tracking since August. What happens in that narrow window, whether the truce lapses, is extended, or collapses into a disorderly reimposition of restrictions on samarium, dysprosium, and the other rare earths that Beijing targeted, will determine the urgency with which Commerce moves to expand the DPA allocation framework to additional materials. The Korean War statute has found new purpose. How broadly it will be applied may depend on what Beijing decides to do next.