🔗 Share this article

Not long ago, the US Treasury Secretary returned from South Carolina brandishing a tiny sample of metal, announcing it was the first rare-earth magnet made in the US in a quarter of a century.

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

Challenging Beijing's Control in Essential Minerals

Overthrowing China’s refining and production supremacy in these materials, which are essential for some semiconductors, energy storage, and military equipment, is a major focus for the federal government. Using tariffs and other approaches, the US is counting on bringing the industry home to American shores.

These measures prompted China to restrict rare-earth shipments to the US and motivated the administration to forge agreements with Australia, a partner, Cambodia, and a key Asian economy.

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

“These materials are essential for EV engines but also in defense technology that have obvious applications for the military,” says an industry expert. “Anything that has a strong magnet in it requires rare earths.”

No Easy Fix for American Self-Sufficiency

It won't be simple for the US to reduce its dependence on imports from China of materials critical to defense, semiconductor production, and the shift from fossil fuels to renewable sources. According to official sources, the US brought in 80% of the rare earths it consumed in 2024.

For some rare-earth minerals such as a key element, essential for chip production, and samarium, critical for defense systems, Chinese refinement dominance rises to almost total. Dysprosium and terbium are used in magnets crucial to electric engines and generators in renewable energy, along with applications for mobile devices, advanced lighting, and energy plants.

Long-Term Efforts and International Resources

Efforts to cut the US’s dependence on China's output of rare-earth minerals could take years. Analysts point out that “Rare earths” is somewhat of a misnomer 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.

“It’s not that there’s a shortage itself, it’s that China can control how much is sent abroad,” a specialist explained, adding that obtaining export licenses from China can be a complex and time-consuming endeavor.

The Arctic region, another focus of US attention, and Brazil, are two other countries with substantial rare-earth resources. Domestically, there are reserves in the West, Wyoming, and Missouri, with the largest operational mine operating at Mountain Pass, the state, not far from a major city.

Government Initiatives and Funding

Recently, the Pentagon became the largest shareholder in an industry operator, with plans to open a new “mine-to-magnet” plant, named 10X, to make magnets crucial for military aircraft, unmanned systems, and submarines.

In North America, 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—significantly lower than the vast reserves estimated to be in China.

Mirroring government funding in the steel industry and US chipmakers, the federal agency announced it was ready to make direct investments in strategic resource firms.

“You’re competing against government-backed investment because Beijing is selecting these as priority areas that they aim to control,” a cabinet member said during a address in April.

The official floated that the US could utilize a national investment pool to speed production. “Why wouldn’t the richest nation in the world have the biggest state investment fund?” he asked.

Historical Obstacles and Prospects

US efforts to support homegrown output have struggled in the past when China cut costs, making unsubsidized rare-earth development unprofitable against China’s lower cost of production and long-term strategic outlook.

Five years ago, an industry leader stated before a US Senate committee that “nations that fund in battery capacity and supply chains now are likely to lead this sector for generations to come. It is not too late for the US but action is needed now.”

Since then, a scramble to assemble international partnerships around rare earths is accelerating.

“Soon, we’ll have an abundance of essential resources that supply will exceed demand,” a top leader told reporters. This followed eight months after a demand for payment in the form of natural resources from Ukraine. More recently, the government of Pakistan agreed to a deal with an American company, giving it access to minerals such as antimony and copper.

Can the US Succeed?

But, is America able to close its shortfall and weaken China’s hold on rare-earth global networks? “America has implemented major measures so far,” a specialist says. The nation, he adds, cannot be “self-reliant in the near future because it takes time to start operations and build refining capacity.”