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Last week, the US Treasury Secretary came back from a southern state brandishing a small piece of metal, proclaiming it was the initial rare-earth magnet manufactured in the US in decades.

The official stated that this was a sign the US is overcoming “Beijing's grip on our industrial pipeline.” Because of a recently opened rare-earth mineral manufacturing plant in the state, the official continued, “We’re finally becoming independent again.”

Countering China’s Dominance in Essential Minerals

Reducing China’s refining and production supremacy in these materials, which are vital for some semiconductors, energy storage, and military equipment, is a top priority for the current US administration. Through trade measures and other strategies, the US is counting on returning the industry back to American shores.

Such measures prompted China to limit rare-earth shipments to the US and pushed the administration to sign deals with an ally, Malaysia, Cambodia, 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 global processing capacity—has a head start that may prove challenging to erode.

“These materials are essential for EV engines but also in defense technology that have obvious applications for the defense department,” notes 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 Chinese production of materials essential to national security, semiconductor production, and the shift from traditional energy to wind and solar. According to official sources, the US brought in the vast majority of the rare earths it consumed in 2024.

For some rare-earth minerals such as a key element, used in chip production, and samarium, essential to defense systems, Chinese refinement dominance rises to almost total. Dysprosium and terbium are found in magnets essential for EV motors and generators in wind turbines, along with uses in cellphones, advanced lighting, and energy plants.

Long-Term Efforts and Global Deposits

Initiatives to cut the US’s dependence on Chinese production of rare-earth minerals may require a long time. Experts note that “These minerals” is not entirely accurate because they’re not that uncommon in the planet's surface, but many reserves, such as those in Ukraine, where an agreement was made recently, are only in the initial phases of extraction.

“The issue isn't scarcity per se, it’s that China can control how much is exported,” a specialist said, adding that securing export licenses from China can be a lengthy, difficult process.

The Arctic region, another focus of American interest, and Brazil, are additional nations with substantial rare-earth resources. Domestically, there are reserves in the West, Wyoming, and Missouri, with the biggest active site operating at a key location, the state, about 60 miles from a major city.

Government Initiatives and Investment

Recently, the US Department of Defense became the largest shareholder in a mining company, with plans to open a new “mine-to-magnet” plant, named 10X, to make magnets essential for F-35 fighter jets, drones, and submarines.

Across the continent, measured and indicated resources of rare earths were estimated to include millions of tons in the US and more than 14m tons in Canada—significantly lower than the 44m tons believed to be in the Asian giant.

Mirroring government funding in other sectors and domestic technology firms, the federal agency announced it was ready to make direct investments in strategic resource firms.

“The US is up against state capital because Beijing is picking these as priority areas that they aim to control,” a cabinet member stated during a speech this spring.

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

Past Challenges and Future Outlook

US efforts to support homegrown output have struggled in the past when Chinese producers cut costs, making unsupported rare-earth development uneconomic against Asia's competitive pricing 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 industrial networks now are poised to lead this sector for the foreseeable future. There is still time for the US but immediate steps are required.”

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

“In about a year from now, we’ll have so much critical mineral and rare earths that you won’t know what to do with them,” the President informed reporters. This followed in the wake of a request for payment in the form of natural resources from Ukraine. In September, the government of Pakistan signed a contract with an US firm, giving it access to minerals such as antimony and copper.

Prospects for Success

But, can the US make up its gap and weaken China’s hold on rare-earth global networks? “The US has taken really significant steps so far,” an analyst comments. The US, he continues, is unlikely to become “self-reliant in the short term because it requires years to start operations and establish processing plants.”