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Recently, a top US official came back from South Carolina displaying a small piece of metal, declaring it was the first rare-earth magnet made in the US in 25 years.

The official stated that this was a sign the US is breaking “China's dominance on our industrial pipeline.” Thanks to a recently opened rare-earth mineral processing center in South Carolina, he added, “The nation is regaining its autonomy.”

Challenging Beijing's Control in Critical Materials

Overthrowing China’s refining and production supremacy in these materials, which are essential for some semiconductors, energy storage, and armaments, is a key goal for the current US administration. Via tariffs and other approaches, the US is counting on bringing the industry home to domestic facilities.

Such measures prompted China to limit rare-earth exports to the US and motivated US leaders to forge agreements with an ally, a partner, Cambodia, and a key Asian economy.

While the US and China have now brokered a temporary agreement on rare earths, Beijing—with approximately 70% of worldwide extraction and over 90% of global processing capacity—has a head start that may prove challenging to overcome.

“These materials are used in electric motors but also in defense technology that have obvious applications for the military,” notes an industry expert. “Any device that has a strong magnet in it requires rare earths.”

Challenging Path for American Self-Sufficiency

There’s no easy fix for the US to reset its reliance on Chinese production of minerals critical to defense, chip manufacturing, and the shift from traditional energy to wind and solar. According to official sources, the US imported the vast majority of the rare earths it consumed in 2024.

For some rare-earth minerals such as a key element, essential for semiconductors, and another mineral, critical for military applications, Chinese refinement dominance reaches almost total. These elements are found in magnets essential for electric engines and power systems in renewable energy, along with uses in mobile devices, advanced lighting, and energy plants.

Extended Timelines and Global Deposits

Efforts to cut the US’s dependence on China's output of rare-earth minerals may require a long time. Experts note that “Rare earths” is not entirely accurate because they’re not that uncommon in the earth’s crust, but many reserves, such as those in Eastern Europe, where an agreement was made earlier this year, are only in the initial phases of extraction.

“It’s not that there’s a shortage per se, it’s that China can control how much is exported,” a specialist said, noting that obtaining permits from China can be a complex and time-consuming endeavor.

The Arctic region, a key area of US attention, and Brazil, are two other countries with significant rare-earth deposits. In the continental US, there are reserves in the West, Wyoming, and Missouri, with the biggest active site located at Mountain Pass, the state, about 60 miles from a major city.

Government Initiatives and Funding

Recently, the US Department of Defense took on the role of the largest shareholder in an industry operator, with plans to open a new “mine-to-magnet” plant, named 10X, to produce magnets essential for military aircraft, drones, and naval vessels.

Across the continent, estimated reserves of rare earths were estimated to include millions of tons in the US and additional millions in the northern neighbor—significantly lower than the 44m tons believed to be in the Asian giant.

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 selecting these as priority areas that they want to invest in,” a senior official stated during a address in April.

He floated that the US could use a sovereign wealth fund to accelerate production. “How could the richest nation in the world not possess the biggest state investment fund?” he asked.

Past Challenges and Future Outlook

US efforts to promote domestic production have floundered in the past when China cut costs, making unsupported rare-earth development uneconomic against China’s lower cost of production and far-sighted planning.

Five years ago, an industry leader testified before a US Senate committee that “those who invest in battery capacity and supply chains now are poised to dominate this sector for generations to come. It is not too late for the US but action is needed now.”

Five years on, a race to assemble trading alliances around rare earths is accelerating.

“In about a year from now, we’ll have so much essential resources that supply will exceed demand,” a top leader informed reporters. That came in the wake of a demand for compensation in the form of natural resources from another country. More recently, the government of Pakistan agreed to a contract with an US firm, securing rights to minerals such as antimony and copper.

Prospects for Success

However, is America able to close its gap and weaken China’s hold on rare-earth global networks? “America has implemented really significant steps so far,” an analyst comments. The US, he adds, is unlikely to become “self-reliant in the short term because it takes time to start operations and build refining capacity.”