On July 30, 2026, President Trump issued a Presidential Determination under Section 101 of the Defense Production Act, granting the Commerce Department authority to restrict exports of recoverable critical minerals including black mass, end-of-life rare-earth magnets, and manufacturing scrap. The move signals a new frontier in American mineral security policy: rather than simply trying to dig more out of the ground, Washington is now asserting sovereign claim over the critical materials already embedded in the nation's discarded electronics, spent batteries, and industrial waste. Whether the domestic recycling industry can absorb what it is being asked to keep remains the central unresolved question.
Introduction
On a loading dock outside a battery processing facility in rural Ohio, a shipping container sat waiting last spring, packed with roughly forty tonnes of black mass: the dark, powdery residue that remains after lithium-ion batteries are shredded, dried, and crushed. Inside that powder, locked in the chemical residue of ten thousand spent electric vehicle packs, were recoverable quantities of lithium, nickel, cobalt, and graphite. The container was bound for South Korea, where a hydrometallurgical facility would extract those materials, refine them into battery-grade compounds, and sell them back into the global supply chain, possibly back to American manufacturers.
That journey, unremarkable in its logistics and routine in its economics, has now become the subject of a presidential determination. On July 30, 2026, President Trump signed Determination 2026-19 under Section 101 of the Defense Production Act, finding that recoverable critical minerals and materials (CMMs) are "scarce and critical materials essential to the national defence" and that national defense requirements for them "cannot otherwise be met without creating a significant dislocation of the normal distribution of such material in the civilian market." The White House published its fact sheet the same day; the determination appeared in the Federal Register four days later.
The immediate legal effect is not a ban. No container is being stopped, no export license denied, no shipment interrupted. What Trump's July 30 determination does is pull a statutory lever that has been available to presidents since the Korean War, unlocking the Commerce Department's authority to institute export restrictions on a defined category of recoverable waste materials. The scope, mechanism, and timeline of any actual controls will depend on rulemaking that has not yet begun. But the signal is unmistakable: the United States is now treating its own industrial garbage as a strategic reserve.
The Legal Architecture: A Cold War Statute Meets a Twenty-First Century Supply Crisis
The Defense Production Act was signed into law in 1950, when the priority was ensuring that American factories could produce enough tanks and artillery shells without crowding out civilian demand for steel and rubber. Its Section 101 authorities have always been broad: the president may control the general distribution of any material in the civilian market, provided two specific findings are made. First, that the material is scarce and critical to national defense. Second, that defense requirements cannot be met without causing appreciable hardship in the civilian market. Trump's July 30 determination satisfies both tests, using language drawn almost verbatim from the statutory standard.
What that unlocks, in practice, is allocation authority: the power to direct Commerce, almost certainly through the Bureau of Industry and Security, to impose licensing requirements, restrict exports, redirect material flows, or require that covered materials be offered to domestic buyers before they leave the country. Under 15 CFR 700.33(b), a directive issued under these authorities can require a person to stop or reduce production of an item, prohibit the use of selected materials, or divert the use of materials, services, or facilities from one purpose to another. Willful violation is a federal crime.
The DPA is not a new instrument for this administration. Trump invoked it on his first day back in office in January 2025 to frame an aggressive energy and minerals agenda, and has since used it to support domestic coal power and offshore oil production off the southern California coast. His predecessors were equally comfortable with the statute: the Biden administration invoked it to boost domestic production of solar panels, heat pumps, and fuel cells. But the July 30 determination is notable for its specificity. It is the first time any administration has used Section 101 allocation authority explicitly to target the secondary minerals stream, the materials that exist not in the ground but in the accumulated technological detritus of American consumer and industrial life.
Patrick Firth, writing for Constitution Partners on the day the determination was signed, noted that the action is best understood as a foundation rather than a policy in itself. "The determination itself imposes no export ban and no immediate restriction of any kind," he observed. "It is the legal foundation on which Commerce will build." That distinction matters enormously for companies currently operating in the space, because the window between the foundation being laid and the walls going up is the period in which compliance strategies, supply chain adjustments, and lobbying campaigns will be most consequential.
What Gets Covered and Why: Black Mass, Swarf, and the End-of-Life Magnet Problem
The materials covered by the determination read like an inventory of industrial afterthought: black mass from processed lithium-ion batteries; end-of-life rare-earth permanent magnets and other goods that have fully completed the manufacturing process; swarf, the fine metallic shavings generated during machining and grinding operations; and other waste and scrap containing critical minerals and materials. Copper scrap is explicitly excluded, already addressed under a separate proclamation from July 2025.
Each of these categories tells a distinct story about where American mineral vulnerability actually lives. Black mass is perhaps the most commercially visible: the United States generated approximately 40,000 tonnes of it in 2024, a figure that Fastmarkets projects will reach 270,000 tonnes by 2034 as the first generation of EV battery packs reaches end-of-life in volume. The problem is that domestic refining capacity to consume that material barely exists. A 2024 assessment by Fastmarkets estimated that the US had only 20,000 tonnes of weighted black mass refining capacity in the same year. When the collection infrastructure produces more material than the processing infrastructure can absorb, the surplus gets shipped abroad, predominantly to South Korean and Japanese processors with the hydrometallurgical facilities to handle it.
The rare-earth magnet category carries different but equally serious strategic weight. Neodymium-iron-boron magnets are the irreplaceable core of F-35 actuators, Tomahawk guidance systems, Virginia-class submarine propulsion, and virtually every other high-performance military platform in the American arsenal. China produces approximately 90 percent of the world's high-performance rare earth magnets and controls roughly 99 percent of global processing capacity for the heavy rare earths, including dysprosium and terbium, that give those magnets their thermal stability at elevated temperatures. When a magnet reaches end of life, whether in a decommissioned aircraft part, a scrapped industrial motor, or a discarded consumer appliance, it contains recoverable heavy rare earth material that is, at this moment, extraordinarily difficult to source outside of China. Allowing that material to be exported for foreign processing means relinquishing a second opportunity to build domestic refining capacity from a feedstock the United States already possesses.
Swarf may be the least glamorous entry on the list, but it carries genuine industrial stakes. Amermin, a privately held recycler, submitted a letter to Commerce Secretary Howard Lutnick in March 2026 arguing that uncontrolled tungsten scrap exports represented an unacceptable risk to American industrial and military readiness. Tungsten, the White House noted, has 83 percent of its global mining concentrated in China and is used in construction equipment and electronic components. The swarf generated by tungsten machining operations at American defense facilities represents a recoverable domestic feedstock for a material that is otherwise almost entirely sourced from a strategic competitor. The determination, in capturing swarf within its coverage, acknowledges that argument formally for the first time.
The Recycling Industry's Moment: Capacity, Bankruptcy, and the Infrastructure Gap
The policy logic of the determination is internally coherent, but it runs directly into a commercial reality that has been generating bankruptcy filings rather than processing capacity. Li-Cycle and Ascend Elements, two of the most prominent American battery recyclers, both entered bankruptcy proceedings within roughly the past year, victims of a market that could not sustain the economics of domestic black mass processing in the absence of either sufficient feedstock or sufficient downstream demand at prices that covered costs. The same infrastructure gap that the White House is now invoking as a national security justification is the gap that destroyed the business models of the companies best positioned to close it.
The scale of the coming challenge is not small. The Department of Energy's own assessment, as of 2023, found that the United States had domestic battery recycling capacity sufficient to reclaim only 35,500 short tons of battery materials per year. Even accounting for planned expansions that would add an additional 76,000 short tons annually, that total falls dramatically short of the volume trajectory that Fastmarkets projects. The US exports roughly 33,000 metric tons of e-scrap every month, according to the Basel Action Network. The determination, if followed by aggressive rulemaking, would effectively require that material to find a domestic home that does not yet fully exist.
The GAO's timing was almost prophetic. Eight days before Trump signed the determination, the Government Accountability Office published report GAO-26-108687, finding that the United States is at least 41 percent import-reliant for each of the eleven critical minerals most consequential for batteries and semiconductors, and entirely import-dependent for five of them: arsenic, gallium, graphite, indium, and manganese. The report noted that battery recycling could reduce import reliance within two to three years but that the country lacks the collection and processing infrastructure to make that feasible at scale. "The technology to extract and refine critical minerals from old batteries is mature," the GAO concluded. "But the U.S. doesn't have the infrastructure needed to collect large quantities of batteries and recycle them."
David Klanecky, president and CEO of Cirba Solutions, one of the domestic recyclers that has so far remained solvent, welcomed the determination as a structural signal rather than an immediate commercial fix. The move "reinforces that critical minerals and the need to keep end-of-life batteries and manufacturing scrap domestically are a long-term strategic priority for the US," Klanecky said, in a statement that was careful to treat the action as direction-setting rather than problem-solving. The distinction reflects genuine uncertainty within the industry: a licensing regime that restricts exports without simultaneously creating conditions for domestic processing to expand could produce a domestic glut of unprocessable black mass, damaging the economics of collection and recycling rather than improving them.
Mirror Images: Washington Learns from Beijing's Playbook
There is something deliberately symmetrical about the July 30 determination, and the Trump administration has not been subtle about the symmetry. China began weaponizing its position in the critical minerals supply chain in April 2025, when it imposed export licensing requirements on seven rare earth elements and related products in response to American tariff escalation. The controls, ostensibly regulatory rather than prohibitive, introduced review mechanisms that complicated export logistics and procurement timelines for buyers in Japan, South Korea, Europe, and the United States. By October 2025, the framework had expanded to cover twelve of the seventeen recognized rare earth elements. In June 2026, Beijing escalated further by adding MP Materials and USA Rare Earth specifically to its export control entity list, halting dual-use exports to both firms.
The commercial effects have been measurable and severe. Chinese customs data show that exports of yttrium to the United States fell from 333 tonnes in the eight months before the April 2025 controls to just 17 tonnes in the eight months after. For all of 2025, China exported 5,933 tonnes of rare earth magnets to the US, a decline of more than 20 percent year-on-year. Neodymium prices increased 34 percent in the first five months of 2026 alone. As I reported in July, the November 2026 expiration of a temporary suspension of China's most sweeping controls represents a concentrated window of supply risk unlike anything the American industrial base has previously confronted.
The July 30 determination is, in this context, an explicit attempt to adopt China's own instrument and deploy it in reverse. Where Beijing restricts what leaves China to maximize leverage over downstream manufacturers abroad, Washington is now asserting the authority to restrict what leaves the United States in order to maximize feedstock availability for domestic processors and deny foreign competitors access to a secondary supply stream. The White House fact sheet framed it in precisely these terms: "allowing them to go overseas gives foreign processors first access to them."
The two-sided architecture that is now emerging from the Trump administration's minerals policy deserves particular attention. As I examined in August 2026 in my analysis of G7 price stabilization mechanisms, the policy debate has migrated decisively from supply availability to the commercial conditions needed to attract private investment into refining and processing. The July 30 determination addresses one side of that equation by restricting the outflow of secondary feedstock. The companion Section 232 investigation into processed critical mineral imports, and the reference pricing and joint procurement frameworks being developed with G7 partners, address the other side by making it more expensive to remain dependent on foreign-processed inputs. Together, they form a two-sided policy architecture: restrict the exit of recoverable materials while simultaneously raising the cost of the import alternative.
The January 2027 Clock and the Rulemaking That Will Define Everything
The July 30 determination sits within an administration-wide critical minerals push that has been accelerating toward a specific deadline. From January 1, 2027, defense contractors are required to cease sourcing certain critical materials from Chinese, Russian, Iranian, and North Korean suppliers. That deadline, embedded in the July 20 executive order that I covered in my reporting on EO 14415 and the defense supply chain mapping requirement, is already generating anxiety throughout the defense industrial base. Industry experts have been candid that domestic production capacity, for both primary and secondary materials, remains far from adequate to meet it.
The determination and EO 14415 are designed to work in tandem, though their legal mechanisms are entirely distinct. The July 20 order requires contractors to map their supply chains from raw materials to finished weapons systems and imposes progressively stricter waiver requirements for non-compliant sourcing. The July 30 determination creates the legal authority to ensure that recoverable materials generated within those supply chains, the machining swarf from a tungsten-tipped missile component, the end-of-life magnets from a decommissioned guidance system, the black mass from batteries used in military vehicles, remain available for domestic recycling and re-entry into the defense supply chain rather than being exported for foreign processing. The Pentagon's own 2023 assessment identified 2.41 billion dollars in military material shortfalls across 69 materials, with heavy rare earths forming a critical subset. Closing even a portion of that gap through secondary recovery would represent a meaningful improvement in readiness.
But the practical effect will depend almost entirely on how Commerce moves through the rulemaking process, and the rulemaking has not yet begun. Companies currently exporting black mass and e-scrap will be watching for a Notice of Proposed Rulemaking that defines coverage, establishes any licensing framework, and sets enforcement timelines. The gap between the determination and the actual rules is the period during which the policy is real in theory but not in practice, and that gap could be months or years depending on the pace of regulatory development and the intensity of industry lobbying.
The domestic recycling market has the financial incentives to support investment if the regulatory framework stabilizes. The US black mass recycling market was valued at approximately 1.16 billion dollars in 2024 and is projected to reach 4.75 billion dollars by 2033 at a compound annual growth rate of 17.2 percent. Globally, the black mass recycling market was valued at 10.18 billion dollars in 2025 and is projected to reach 29.02 billion dollars by 2034. Asia Pacific currently holds 83 percent of global market share. The determination is, at its core, a policy argument that a larger fraction of that market share should be American, and that the secondary materials currently leaving the country are the feedstock from which that market share could be built.
Conclusion: The Container on the Dock
Back in Ohio, that container of black mass has long since sailed. The determination signed on July 30 arrived too late to intercept it, and the rulemaking that would give the determination practical teeth has not yet been written. The South Korean processors who received that material will refine it, extract the lithium and nickel and cobalt, and sell the resulting compounds into global battery supply chains. Some of those compounds will likely find their way back to American EV manufacturers. The circle will close, as it has been closing for years, in facilities located in Seoul and Ulsan rather than in Ohio.
What has changed is the official American position on whether that is acceptable. For decades, the premise of American industrial policy was that comparative advantage was a sufficient guide: if South Korean processors could handle black mass more cheaply than American ones, then the rational response was to let them. The July 30 determination formally rejects that premise for this category of material. It asserts, in the language of a 1950 statute written for a different era, that some materials are too strategically important to be allocated by market signals alone, and that the accumulated technological waste of American consumer and industrial life constitutes a sovereign resource that the government has both the authority and the obligation to direct.
Whether the Commerce Department can build a regulatory framework that retains enough material to make a difference without crippling the collection economics that make recovery viable in the first place is the central policy question that will define the determination's legacy. The urban ore body is real: the US Geological Survey has confirmed that substantial quantities of critical minerals are locked inside finished goods already within American borders, requiring no new geological discovery and no new permitting. The challenge is not geological. It is commercial, infrastructural, and regulatory. Presidential determinations can establish authority. They cannot conjure hydrometallurgical capacity from a loading dock in Ohio.