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Not long ago, the US Treasury Secretary came back from a southern state brandishing a small piece of metal, proclaiming it was the first rare-earth magnet produced in the US in 25 years.

The official stated that this was proof the US is overcoming “China's dominance on our supply chain.” Due to a recently opened rare-earth mineral processing center in South Carolina, the official continued, “America is reclaiming its self-sufficiency.”

Challenging China’s Dominance in Essential Minerals

Reducing Beijing's refining and production supremacy in these materials, which are essential for some semiconductors, energy storage, and armaments, is a major focus for the current US administration. Via economic tools and other approaches, the US is relying on returning the industry back to American shores.

Such tariffs led Beijing to limit rare-earth shipments to the US and motivated the administration to forge agreements with an ally, a partner, Cambodia, and a key Asian economy.

While the US and China have since brokered a trade truce on rare earths, Beijing—with around 70% of global mining and over 90% of global processing capacity—has a head start that will be difficult to overcome.

“These materials are used in EV engines but also in guidance systems that have obvious applications for the military,” notes an industry expert. “Any device that has a decent magnet in it requires rare earths.”

Challenging Path for US Independence

There’s no easy fix for the US to reduce its reliance on Chinese production of minerals critical to defense, semiconductor production, and the transition from fossil fuels to wind and solar. Data from 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 semiconductors, and another mineral, essential to defense systems, China's control over processing rises to almost total. Dysprosium and terbium are found in magnets essential for EV motors and generators in renewable energy, along with uses in mobile devices, high-intensity lighting, and nuclear reactors.

Long-Term Efforts and Global Deposits

Efforts to reduce the US’s reliance on Chinese production of rare-earth minerals could take years. Experts note that “These minerals” is not entirely accurate because they’re not that uncommon in the planet's surface, but many reserves, including those in Eastern Europe, where a deal was made recently, are only in the initial phases of mining.

“The issue isn't scarcity itself, it’s that China can control how much is exported,” an analyst explained, adding that securing permits from China can be a complex and time-consuming endeavor.

The Arctic region, a key area of American interest, and Brazil, are two other countries with substantial rare-earth deposits. In the continental US, there are reserves in California, the Midwest, and Missouri, with the largest operational mine operating at a key location, the state, not far 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 “integrated” plant, called a new facility, to make magnets essential for F-35 fighter jets, drones, and naval vessels.

Across the continent, estimated reserves of rare earths were estimated to include millions of tons in the US and more than 14m tons in the northern neighbor—far less than the vast reserves believed to be in China.

Mirroring direct investment in the steel industry and US chipmakers, the interior department 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 want to invest in,” a senior official stated during a speech in April.

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

Past Challenges and Future Outlook

US efforts to promote domestic production have struggled in the past when China lowered prices, making unsupported 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 congressional panel that “nations that fund in energy storage and industrial networks now are likely to lead this sector for the foreseeable future. It is not too late for the US but action is needed now.”

Five years on, a race to assemble trading alliances around rare earths is accelerating.

“Soon, we’ll have so much critical mineral and rare earths that supply will exceed demand,” the President told reporters. This followed eight months after a request for payment in the form of natural resources from Ukraine. More recently, the authorities in Asia signed a deal with an US firm, giving it access to minerals such as antimony and copper.

Can the US Succeed?

However, can the US make up its gap and loosen Beijing's grip on rare-earth global networks? “The US has taken major measures already,” a specialist 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.”