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Recently, the US Treasury Secretary returned from South Carolina brandishing a small piece of metal, proclaiming it was the first rare-earth magnet made in the US in decades.

The official stated that this was evidence the US is overcoming “Beijing's grip on our supply chain.” Thanks to a recently opened rare-earth mineral processing center in the state, he noted, “America is reclaiming its self-sufficiency.”

Breaking Beijing's Control in Critical Materials

Reducing China’s processing and manufacturing dominance in these minerals, which are essential for advanced electronics, energy storage, and military equipment, is a top priority for the American leadership. Using tariffs and other strategies, the US is counting on bringing the industry back to American shores.

Such tariffs prompted China to restrict rare-earth shipments to the US and pushed US leaders to sign deals with Australia, Malaysia, Cambodia, and a key Asian economy.

Although the US and China have since reached a trade truce on rare earths, Beijing—with approximately the majority of worldwide extraction and nearly all of international refining—has a head start that will be difficult to diminish.

“Rare earths are used in EV engines but also in defense technology that have clear uses for the defense department,” notes an industry expert. “Any device that has a strong magnet in it uses rare earths.”

No Easy Fix for American Self-Sufficiency

It won't be simple for the US to reset its reliance on Chinese production of minerals essential to defense, chip manufacturing, and the shift from traditional energy to renewable sources. According to official sources, the US imported the vast majority of the rare earths it used in 2024.

For some rare-earth minerals such as a key element, used in chip production, and another mineral, critical for defense systems, Chinese refinement dominance reaches almost total. Dysprosium and terbium are used in magnets essential for EV motors and generators in wind turbines, along with applications for mobile devices, advanced lighting, and nuclear reactors.

Extended Timelines and Global Deposits

Initiatives to cut the US’s dependence on China's output of rare-earth minerals may require a long time. Analysts point out that “These minerals” is not entirely accurate because they’re not that uncommon in the earth’s crust, but many deposits, such as those in Ukraine, where a deal was signed earlier this year, are only in the early stages of extraction.

“The issue isn't scarcity per se, it’s that China can limit how much is sent abroad,” a specialist said, noting that obtaining export licenses from China can be a complex and time-consuming endeavor.

The Arctic region, a key area of US attention, and South America, are additional nations with substantial rare-earth resources. In the continental US, there are deposits in California, Wyoming, and Missouri, with the largest operational mine operating at a key location, California, about 60 miles from a major city.

Government Initiatives and Investment

In July, the US Department of Defense took on the role of the major investor in an industry operator, with intentions to open a new “mine-to-magnet” plant, named 10X, to produce magnets essential for military aircraft, unmanned systems, and submarines.

In North America, measured and indicated resources of rare earths were calculated at millions of tons in the US and more than 14m tons in the northern neighbor—significantly lower than the 44m tons estimated to be in China.

Following direct investment in the steel industry and domestic technology firms, the interior department announced it was prepared to make targeted funding in critical mineral companies.

“The US is up against government-backed investment because China is picking these strategically that they aim to control,” a senior official said during a speech in April.

The official suggested that the US could use a national investment pool to speed production. “How could the wealthiest country in the world have the biggest sovereign wealth fund?” he questioned.

Past Challenges and Future Outlook

American attempts to promote domestic production have struggled in the past when Chinese producers lowered prices, rendering unsupported rare-earth development unprofitable against China’s lower cost of production and far-sighted planning.

Five years ago, a market expert stated before a congressional panel that “those who invest in energy storage and industrial networks today are poised to dominate this industry for generations to come. There is still time for the US but action is needed now.”

Five years on, a scramble to build international partnerships around rare earths is accelerating.

“Soon, we’ll have so much critical mineral and rare earths that supply will exceed demand,” a top leader informed the media. That came eight months after a demand for compensation in the form of minerals from Ukraine. More recently, the authorities in Asia agreed to a contract with an US firm, securing rights to minerals such as key metals.

Prospects for Success

However, can the US make up its shortfall and loosen China’s hold on rare-earth global networks? “America has implemented really significant steps already,” a specialist says. The US, he continues, cannot be “independent in the short term because it takes time to bring a mine online and build refining capacity.”