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Last week, the US Treasury Secretary came back from South Carolina displaying a tiny sample of metal, proclaiming it was the first rare-earth magnet produced in the US in a quarter of a century.

He indicated that this was a sign the US is ending “China's dominance on our supply chain.” Thanks to a new rare-earth mineral refining facility in the state, he noted, “The nation is regaining its autonomy.”

Challenging Beijing's Control in Essential Minerals

Overthrowing Beijing's processing and manufacturing dominance in these materials, which are crucial for some semiconductors, batteries, and armaments, is a major focus for the current US administration. Through tariffs and other approaches, the US is counting on returning the industry back to US soil.

Such measures led Beijing to limit rare-earth shipments to the US and motivated the administration to sign deals with an ally, Malaysia, another nation, and a key Asian economy.

Although the US and China have since brokered a temporary agreement on rare earths, Beijing—with around the majority of global mining and over 90% of international refining—has a head start that will be difficult to erode.

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

Challenging Path for American Self-Sufficiency

It won't be simple for the US to reduce its reliance on Chinese production of materials critical to defense, semiconductor production, and the transition from traditional energy to wind and solar. Data from federal reports, the US imported 80% of the rare earths it consumed in 2024.

For some rare-earth minerals such as dysprosium, used in chip production, and another mineral, critical for military applications, China's control over processing rises to almost total. Dysprosium and terbium are used in magnets essential for electric engines and power systems in renewable energy, along with uses in mobile devices, advanced lighting, and energy plants.

Long-Term Efforts and International Resources

Initiatives to cut the US’s dependence on Chinese production of rare-earth minerals may require a long time. Experts note that “Rare earths” is somewhat of a misnomer because they’re not that uncommon in the earth’s crust, but many deposits, including those in Eastern Europe, where an agreement was signed earlier this year, are only in the initial phases of extraction.

“The issue isn't scarcity itself, it’s that Beijing can limit how much is sent abroad,” an analyst said, noting that securing export licenses from China can be a lengthy, difficult process.

Greenland, a key area of US attention, and South America, are two other countries with significant rare-earth deposits. In the continental US, there are reserves in the West, Wyoming, and Missouri, with the largest operational mine operating at a key location, the state, about 60 miles from Las Vegas.

Government Initiatives and Investment

Recently, the US Department of Defense became the major investor in an industry operator, with plans to open a new “integrated” plant, called a new facility, to make magnets essential for F-35 fighter jets, drones, and submarines.

In North America, estimated reserves of rare earths were calculated at 3.6m tons in the US and more than 14m tons in Canada—significantly lower than the 44m tons estimated to be in the Asian giant.

Mirroring government funding in the steel industry and US chipmakers, the federal agency announced it was prepared to make direct investments in critical mineral companies.

“You’re competing against government-backed investment because China is selecting these strategically that they aim to control,” a cabinet member said during a speech in April.

He floated that the US could utilize a national investment pool to accelerate production. “Why wouldn’t the richest nation in the world have the largest state investment fund?” he questioned.

Past Challenges and Future Outlook

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

Five years ago, a market expert testified before a US Senate committee that “nations that fund in battery capacity and supply chains now are poised to lead this industry for the foreseeable future. There is still time for the US but immediate steps are required.”

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

“In about a year from now, we’ll have an abundance of critical mineral and rare earths that supply will exceed demand,” the President told reporters. That came in the wake of a demand for payment in the form of natural resources from another country. In September, the authorities in Asia agreed to a deal with an American company, giving it access to minerals such as antimony and copper.

Prospects for Success

But, can the US make up its shortfall and weaken China’s hold on rare-earth supply chains? “America has implemented really significant steps already,” an analyst says. The US, he continues, cannot be “self-reliant in the near future because it requires years to start operations and build refining capacity.”