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

He indicated that this was evidence the US is ending “Beijing's grip on our industrial pipeline.” Due to a new rare-earth mineral refining facility in South Carolina, the official continued, “America is reclaiming its self-sufficiency.”

Countering China’s Dominance in Critical Materials

Ending China’s refining and production supremacy in these materials, which are essential for advanced electronics, batteries, and armaments, is a major focus for the American leadership. Via tariffs and other approaches, the US is betting on returning the industry back to US soil.

Such tariffs prompted Beijing to restrict rare-earth exports to the US and motivated the administration to forge agreements with Australia, Malaysia, another nation, and a key Asian economy.

While the US and China have now reached a trade truce on rare earths, China—with around the majority of global mining and nearly all of global processing capacity—has a head start that may prove challenging to diminish.

“These materials are essential for EV engines but also in guidance systems that have clear uses for the military,” says an industry expert. “Any device that has a strong magnet in it uses rare earths.”

Challenging Path for American Self-Sufficiency

It won't be simple for the US to reduce its dependence on Chinese production of materials essential to defense, semiconductor production, and the transition from traditional energy to wind and solar. According to official sources, the US imported the vast majority of the rare earths it used in 2024.

For some rare-earth minerals such as a key element, used in chip production, and samarium, essential to defense systems, China's control over processing rises to almost total. Dysprosium and terbium are found in magnets crucial to electric engines and generators in renewable energy, along with applications for mobile devices, high-intensity lighting, and nuclear reactors.

Extended Timelines and Global Deposits

Initiatives to cut the US’s reliance on China's output of rare-earth minerals could take years. Analysts point out that “These minerals” is not entirely accurate because they’re not that uncommon in the earth’s crust, but many reserves, including those in Eastern Europe, where a deal was signed earlier this year, are only in the initial phases of mining.

“The issue isn't scarcity itself, it’s that China can limit how much is sent abroad,” a specialist explained, noting that securing export licenses from China can be a complex and time-consuming endeavor.

Greenland, a key area of US attention, and South America, are two other countries with significant rare-earth deposits. Domestically, there are deposits in California, the Midwest, and Missouri, with the biggest active site operating at Mountain Pass, the state, about 60 miles from a major city.

Government Initiatives and Investment

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

In North America, measured and indicated resources of rare earths were calculated at millions of tons in the US and more than 14m tons in Canada—far less than the vast reserves believed to be in the Asian giant.

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

“You’re competing against state capital because China is selecting these as priority areas that they aim to control,” a cabinet member stated during a speech in April.

He floated that the US could utilize a sovereign wealth fund to accelerate production. “How could the wealthiest country in the world not possess the largest state investment fund?” he asked.

Past Challenges and Prospects

US efforts to promote homegrown output have floundered in the past when Chinese producers lowered prices, rendering unsupported rare-earth development uneconomic against Asia's competitive pricing and far-sighted planning.

In the past, a market expert testified before a US Senate committee that “those who invest 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 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 essential resources that you won’t know what to do with them,” a top leader informed reporters. That came eight months after a demand for payment in the form of minerals from Ukraine. More recently, the authorities in Asia signed a deal with an American company, giving it access to minerals such as antimony and copper.

Prospects for Success

But, is America able to close its gap and weaken China’s hold on rare-earth global networks? “The US has taken really significant steps so far,” an analyst says. The US, he adds, cannot be “independent in the near future because it takes time to bring a mine online and build refining capacity.”