Shares of USA Rare Earth Inc. (USAR) surged 5.05% during intraday trading on Tuesday, as investors reacted to news of potential Chinese restrictions on rare-earth exports. The stock's movement comes amid renewed tensions between the United States and China in the strategic rare-earth metals market.

According to recent reports, Beijing is contemplating the implementation of a "validated end-user" (VEU) system for rare-earth export licenses. This move could significantly impact U.S. defense contractors' ability to obtain these critical metals, which are essential components in various high-tech and military applications, including communications equipment and F-35 fighter jets.

The potential restrictions have reignited concerns about the global rare-earth supply chain, of which China controls an estimated 85% of global refining capacity. This development has sparked investor interest in U.S.-based rare-earth miners like USA Rare Earth, as they could benefit from increased domestic demand and potential government support. The situation underscores the ongoing efforts by the U.S. Pentagon to secure non-Chinese rare-earth supplies, including recent deals with domestic miners. As trade tensions continue to evolve, investors can expect further volatility in rare-earth mining stocks, with USA Rare Earth positioned as a potential beneficiary of these geopolitical shifts.