MP Materials Corp. ( MP ) shares are trading higher Tuesday potentially tied to China's announcement of a ban on exports of key minerals, including gallium, germanium, and antimony, to the United States. Here’s what you need to know.

What To Know: The export restrictions were announced by China's Ministry of Commerce and are justified on national security grounds, targeting materials with dual-use military and civilian potential. These materials have critical applications in semiconductors, military technologies and renewable energy components.

China's decision to tighten export controls comes after the U.S. imposed its latest restrictions on China's semiconductor sector, adding 140 Chinese companies to a trade blacklist. The escalating trade tensions between the U.S. and China are likely to impact global supply chains for critical minerals. Analysts potentially see the restrictions as a response to the Biden administration’s actions and with President-elect Donald Trump taking office soon, further trade measures are anticipated.

MP Materials ( MP ), which focuses on rare earth materials in the U.S., is seen as a potential beneficiary of the tightening supply of these minerals, which are primarily refined and supplied by China. Investors appear to be betting on increased demand for alternative suppliers outside of China, possibly contributing to the sharp rise in the company's share price.

MP Price Action: MP Materials ( MP ) shares were up 10.2% at $22.92 at the time of writing, according to Benzinga Pro.

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