USA Rare Earth Inc. (USAR) stock skyrocketed 28.08% in Monday's pre-market trading, leading a broader surge in rare earth stocks amid escalating tensions between the United States and China over critical mineral exports. The dramatic rise comes as investors bet on alternative suppliers outside of China, which dominates the global rare earth market.

The rally was primarily triggered by China's recent announcement of tightened export controls on rare earth minerals, prompting U.S. President Donald Trump to threaten retaliatory tariffs of up to 100% on Chinese goods. This geopolitical standoff has intensified concerns about the global supply chain for these critical minerals, essential for high-tech products and defense applications.

Adding to the positive sentiment is a reported potential deal between Australia and the United States. According to an Australian newspaper, Australia is considering a A$1.2 billion ($782 million) strategic minerals reserve as part of a broader agreement with the U.S. This development underscores the growing push by Western nations to reduce their reliance on China for rare earth supplies, potentially benefiting companies like USA Rare Earth.

USA Rare Earth's recent corporate developments have also contributed to investor optimism. The company recently appointed Barbara Humpton as CEO and acquired UK-based Less Common Metals, strengthening its position in the rare earth supply chain. Additionally, the company filed a $153.4 million shelf registration for common stock, signaling potential expansion plans. As geopolitical tensions continue to reshape the rare earth market, USA Rare Earth appears well-positioned to capitalize on the growing demand for non-Chinese sources of these critical minerals.