The executive order states that the US cannot be dependent on imports from "foreign adversaries" for the critical resources, which are crucial to maintaining its "economic and military strength in the 21st century".
"I hereby report that I have issued an Executive Order declaring a national emergency to deal with the threat posed by our Nation's undue reliance on critical minerals, in processed or unprocessed form, from foreign adversaries", Trump said in a letter to Congress on Wednesday.
In the order, Trump said 80 percent of US rare earth elements come directly from China and the remainder is indirectly sourced from China through other countries. In the 1980s, the president added, the United States produced "more of these elements than any other country in the world."
Trump said in the executive order that he has directed his administration to investigate this issue and in the next 60 days suggest any executive action that may be needed against China or other foreign countries, such as tariffs or import restrictions.
The order also requires the administration to produce a report every 180 days starting 1 January 2021, with a threat assessment of the United States' reliance on foreign materials. In addition, the order also seeks to develop secure supply chains in the United States of critical materials.