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Last week, a top US official came back from a southern state holding up a tiny sample of metal, proclaiming it was the initial rare-earth magnet produced in the US in a quarter of a century.

He indicated that this was evidence the US is ending “China's dominance on our industrial pipeline.” Thanks to a recently opened rare-earth mineral manufacturing plant in South Carolina, he noted, “America is reclaiming its self-sufficiency.”

Challenging China’s Dominance in Critical Materials

Reducing China’s refining and production supremacy in these minerals, which are crucial for some semiconductors, batteries, and military equipment, is a major focus for the current US administration. Through tariffs and other approaches, the US is betting on returning the industry home to American shores.

These measures prompted Beijing to restrict rare-earth exports to the US and motivated US leaders to sign deals with Australia, Malaysia, another nation, and a key Asian economy.

While the US and China have since brokered a temporary agreement on rare earths, China—with approximately 70% of global mining and nearly all of international refining—holds an advantage that may prove challenging to erode.

“Rare earths are used in electric motors but also in guidance systems that have clear uses for the defense department,” notes an industry expert. “Any device that has a decent magnet in it uses rare earths.”

No Easy Fix for US Independence

It won't be simple for the US to reduce its dependence on imports from China of minerals essential to defense, semiconductor production, and the transition from traditional energy to renewable sources. Data from federal reports, the US imported the vast majority of the rare earths it used in 2024.

In the case of rare-earth minerals such as a key element, essential for chip production, and samarium, critical for military applications, Chinese refinement dominance reaches almost total. These elements are used in magnets crucial to EV motors and power systems in renewable energy, along with uses in mobile devices, high-intensity lighting, and nuclear reactors.

Extended Timelines and International Resources

Initiatives to cut the US’s dependence on China's output of rare-earth minerals may require a long time. Analysts point out that “Rare earths” is not entirely accurate because they’re relatively abundant in the planet's surface, but many deposits, such as those in Eastern Europe, where an agreement was signed earlier this year, are only in the early stages of extraction.

“The issue isn't scarcity per se, it’s that Beijing can limit how much is exported,” an analyst explained, adding that obtaining export licenses from China can be a lengthy, difficult process.

Greenland, a key area of American interest, and Brazil, are two other countries with significant rare-earth resources. In the continental US, there are reserves in California, the Midwest, and the central US, 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 largest shareholder in an industry operator, with plans to open a new “mine-to-magnet” plant, named 10X, to make magnets crucial for F-35 fighter jets, unmanned systems, and submarines.

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

Mirroring direct investment in the steel industry and US chipmakers, the federal agency said it was prepared to make targeted funding in critical mineral companies.

“The US is up against government-backed investment because Beijing is selecting these strategically that they want to invest in,” a cabinet member said during a speech this spring.

The official floated that the US could utilize a national investment pool to speed production. “Why wouldn’t the wealthiest country in the world have the largest sovereign wealth fund?” he questioned.

Past Challenges and Prospects

US efforts to support homegrown output have struggled in the past when Chinese producers lowered prices, rendering unsupported rare-earth development unprofitable against Asia's competitive pricing and long-term strategic outlook.

In the past, a market expert testified before a US Senate committee that “nations that fund in energy storage and industrial networks 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 race to build trading alliances around rare earths is accelerating.

“In about a year from now, we’ll have an abundance of essential resources that you won’t know what to do with them,” the President told the media. That came eight months after a request for compensation in the form of natural resources from another country. In September, 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 gap and loosen China’s hold on rare-earth supply chains? “The US has taken major measures so far,” an analyst comments. The nation, he adds, cannot be “self-reliant in the near future because it takes time to start operations and build refining capacity.”