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Recently, the US Treasury Secretary returned from South Carolina holding up a tiny sample of metal, declaring it was the initial rare-earth magnet manufactured in the US in 25 years.

The official stated that this was evidence the US is overcoming “China’s chokehold on our industrial pipeline.” Because of a recently opened rare-earth mineral processing center in the state, the official continued, “America is reclaiming its self-sufficiency.”

Challenging China’s Dominance in Critical Materials

Ending China’s refining and production supremacy in these materials, which are essential for advanced electronics, batteries, and military equipment, is a top priority for the federal government. Through tariffs and other strategies, the US is relying on returning the industry home to domestic facilities.

These tariffs led Beijing to restrict rare-earth shipments to the US and pushed US leaders to forge agreements with Australia, Malaysia, another nation, and Japan.

Although the US and China have now brokered a trade truce on rare earths, China—with around 70% of worldwide extraction and over 90% of global processing capacity—holds an advantage that will be difficult to erode.

“These materials are essential for EV engines but also in defense technology that have clear uses for the defense department,” notes a market analyst. “Any device that has a decent magnet in it uses rare earths.”

No Easy Fix for US Independence

There’s no easy fix for the US to reset its reliance on Chinese production of materials critical to national security, chip manufacturing, and the transition from traditional energy to renewable sources. According to official sources, the US imported 80% of the rare earths it consumed in 2024.

In the case of rare-earth minerals such as a key element, used in chip production, and another mineral, essential to military applications, China's control over processing rises to almost total. These elements are found in magnets crucial to EV motors and power systems in renewable energy, along with applications for cellphones, advanced lighting, and nuclear reactors.

Extended Timelines and Global Deposits

Efforts to reduce the US’s dependence on China's output of rare-earth minerals could take years. Analysts point out that “These minerals” is somewhat of a misnomer because they’re relatively abundant in the earth’s crust, but many deposits, including those in Ukraine, where an agreement was made recently, are only in the initial phases of mining.

“It’s not that there’s a shortage per se, it’s that Beijing can control how much is sent abroad,” an analyst explained, adding that obtaining permits from China can be a lengthy, difficult process.

The Arctic region, a key area of American interest, and South America, are two other countries with significant rare-earth resources. Domestically, there are deposits in the West, the Midwest, and Missouri, with the biggest active site located at a key location, the state, about 60 miles from Las Vegas.

Federal Efforts and Funding

In July, the Pentagon took on the role of the major investor in an industry operator, with plans to open a new “mine-to-magnet” plant, called a new facility, to produce magnets crucial for F-35 fighter jets, drones, and submarines.

Across the continent, measured and indicated resources of rare earths were estimated to include 3.6m tons in the US and more than 14m tons in the northern neighbor—far less than the 44m tons estimated to be in the Asian giant.

Mirroring direct investment in the steel industry and domestic technology firms, the federal agency said it was ready to make targeted funding in strategic resource firms.

“You’re competing against state capital because Beijing is selecting these as priority areas that they want to invest in,” a senior official said during a address this spring.

He floated that the US could utilize a sovereign wealth fund to speed production. “Why wouldn’t the wealthiest country in the world have the largest sovereign wealth fund?” he asked.

Past Challenges and Prospects

US efforts to promote homegrown output have floundered in the past when Chinese producers cut costs, making unsubsidized rare-earth development unprofitable against China’s lower cost of production and far-sighted planning.

Five years ago, a market expert testified before a US Senate committee that “those who invest in energy storage and industrial networks now are poised to dominate this sector for the foreseeable future. It is not too late for the US but action is needed now.”

Since then, a race to assemble international partnerships around rare earths is speeding up.

“In about a year from now, we’ll have an abundance of essential resources that you won’t know what to do with them,” a top leader informed reporters. This followed eight months after a demand for payment in the form of minerals from another country. More recently, the authorities in Asia agreed to a contract with an American company, giving it access to minerals such as antimony and copper.

Can the US Succeed?

However, is America able to close its gap and loosen China’s hold on rare-earth supply chains? “America has implemented really significant steps already,” an analyst comments. The US, he continues, is unlikely to become “self-reliant in the short term because it takes time to bring a mine online and establish processing plants.”