The multiyear deal, which includes a $200 million upfront payment, will see Apple source American-made rare-earth magnets from MP’s new manufacturing lines in Fort Worth, Texas, and collaborate on a state-of-the-art recycling facility in Mountain Pass, California.

The move, which sent MP’s stock skyrocketing 23% Tuesday morning, not only signals a shift in supply-chain tactics, but also a broader geopolitical hedge as tensions with China escalate.

Building a domestic magnet powerhouse

At the heart of the agreement is Apple’s pledge to buy neodymium magnets, the most widely used type of rare-earth magnet on the planet—essential for iPhones, Macs, and AirPods—manufactured at MP Materials’ Texas facility. The deal will fund the buildout of advanced production lines tailored for Apple’s needs, with the first shipments expected by 2027.

By supplying Apple, MP Materials’ Texas plant is positioned to become a key node in the global rare-earths market, supporting “dozens of new jobs in advanced manufacturing and R&D,” according to Apple’s press release.

As part of the deal, Apple and MP will also launch a dedicated recycling line in California, designed to process rare-earth materials from used electronics and post-industrial scrap. This facility will help Apple in achieving its goal of using 100% recycled rare-earth elements in its devices—a milestone the company has already achieved for nearly all magnets across its product lineup.

It’s unclear exactly how many jobs Apple expects to create directly and indirectly through this partnership, which types of roles will be prioritized, and what development or training programs will Apple and MP Materials launch or lean on to facilitate manufacturing. Apple did not immediately respond to Fortune‘s request for comment.

Insulating against China

This move between Apple and MP Materials comes as the rare-earths market faces intensifying geopolitical headwinds. China currently controls over 90% of global rare-earth magnet production and refining capacity, according to The New York Times, making it a critical chokepoint for the world’s technology supply chains. In recent years, Beijing has demonstrated a willingness to leverage its dominance as a geopolitical tool, raising the specter of export restrictions or price shocks during periods of trade tension.

By investing heavily in domestic production and recycling, Apple is essentially pre-bunkering its supply chain—proactively securing access to critical components before the next global disruption.

The deal with MP Materials, which is also backed by recent Pentagon funding, is widely seen as a strategic hedge against future trade restrictions, tariffs, or diplomatic rifts that could threaten the steady flow of rare earths from China. It also deepens Apple’s control over its component pipeline, from raw material extraction to recycling and final assembly.

Apple’s broader U.S. industrial strategy

This rare-earths initiative dovetails with Apple’s sweeping $500 billion U.S. investment plan, which includes major outlays in semiconductors, AI infrastructure, and workforce development. Recent projects include:

• A new AI server manufacturing facility in Houston, Texas, supporting Apple’s next-generation “Apple Intelligence” platform.
• Expansion of domestic chip production and supplier training academies, aimed at building a robust ecosystem of U.S.-based tech talent and manufacturing partners.
• A projected 20,000 new U.S. jobs in R&D, silicon engineering, and advanced manufacturing over the next four years.

The bottom line

By investing in domestic rare-earth production and recycling, Apple is proactively insulating itself from geopolitical shocks, particularly those stemming from China’s dominance in rare earths and its willingness to weaponize export controls. Apple also gets to advance its environmental goals through this deal, which strengths its brand among consumers and investors to some degree. But it also serves as a high-profile example of the kind of investment President Trump has long demanded from Silicon Valley, aligning with his administration’s push to reshore manufacturing, create American jobs, and reduce reliance on foreign—especially Chinese—supply chains. Trump’s tariff threats appear to be having an impact.