USA Rare Earth Inc. (USAR) saw its stock price plummet by 5.67% in Tuesday's pre-market trading session, marking a significant reversal from the previous day's gains. This sharp decline comes amidst renewed U.S.-China trade tensions and a broader market pullback, particularly affecting companies in the critical minerals sector.

The sudden downturn can be attributed to several factors. Firstly, China's recent move to effectively ban Chinese companies from doing business with U.S. subsidiaries of South Korean shipbuilder Hanwha Ocean has reignited trade war fears. This action, seen as retaliation against U.S. sanctions, has particularly impacted the rare earth metals market, where China holds a dominant position. Additionally, the stock's decline appears to be a correction following Monday's substantial gains, where USA Rare Earth had surged by 18.36% alongside other rare earth miners.

This volatility in USA Rare Earth's stock price reflects the broader uncertainties in the critical minerals sector. While recent geopolitical developments and initiatives like JPMorgan's $1.5 trillion investment pledge had boosted the sector, today's pullback highlights the ongoing risks associated with U.S.-China trade relations. Investors are closely watching for further developments, including potential U.S. efforts to reduce dependence on Chinese rare earth supplies and the impact of trade tensions on global supply chains.