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Last week, the US Treasury Secretary returned from a southern state holding up a tiny sample of metal, declaring it was the first rare-earth magnet produced in the US in 25 years.

He indicated that this was a sign the US is breaking “Beijing's grip on our industrial pipeline.” Thanks to a new rare-earth mineral manufacturing plant in the state, the official continued, “We’re finally becoming independent again.”

Countering China’s Dominance in Critical Materials

Reducing China’s refining and production supremacy in these materials, which are vital for advanced electronics, energy storage, and armaments, is a top priority for the current US administration. Through trade measures and other approaches, the US is relying on bringing the industry home to American shores.

Such measures prompted Beijing to limit rare-earth shipments to the US and pushed US leaders to sign deals with an ally, Malaysia, another nation, and Japan.

While the US and China have since reached a trade truce on rare earths, China—with approximately 70% of worldwide extraction and nearly all of international refining—has a head start that may prove challenging to erode.

“These materials are used in electric motors but also in defense technology that have obvious applications for the defense department,” notes a market analyst. “Any device that has a strong magnet in it requires rare earths.”

No Easy Fix for US Independence

It won't be simple for the US to reset its dependence on Chinese production of minerals critical to defense, chip manufacturing, and the shift from traditional energy to renewable sources. According to official sources, the US brought in 80% of the rare earths it used in 2024.

For some rare-earth minerals such as dysprosium, essential for semiconductors, and samarium, essential to military applications, China's control over processing rises to 99%. These elements are used in magnets essential for electric engines and power systems in renewable energy, along with applications for cellphones, 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. Experts note that “Rare earths” is not entirely accurate because they’re not that uncommon in the earth’s crust, but many deposits, including those in Eastern Europe, where a deal was made earlier this year, are only in the early stages of mining.

“It’s not that there’s a shortage itself, it’s that Beijing can control how much is sent abroad,” a specialist explained, noting that securing permits from China can be a lengthy, difficult process.

The Arctic region, a key area of US attention, and South America, are two other countries with substantial rare-earth resources. Domestically, there are reserves in California, the Midwest, and the central US, with the largest operational mine operating at Mountain Pass, the state, not far from a major city.

Federal Efforts and Investment

Recently, the Pentagon became the largest shareholder in a mining company, with intentions to open a new “integrated” plant, called 10X, to make magnets essential for military aircraft, unmanned systems, and naval vessels.

Across the continent, estimated reserves of rare earths were estimated to include millions of tons in the US and additional millions in the northern neighbor—significantly lower than the 44m tons believed to be in the Asian giant.

Following government funding in the steel industry and domestic technology firms, the federal agency announced it was prepared to make targeted funding in critical mineral companies.

“You’re competing against government-backed investment because Beijing is selecting these strategically that they aim to control,” a senior official said during a speech in April.

He suggested that the US could use a sovereign wealth fund to accelerate production. “How could the richest nation in the world not possess the largest sovereign wealth fund?” he questioned.

Past Challenges and Prospects

US efforts to promote homegrown output have struggled in the past when China 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 today are likely to lead this sector for the foreseeable future. It is not too late for the US but action is needed now.”

Since then, a race to build trading alliances around rare earths is accelerating.

“Soon, we’ll have an abundance of critical mineral and rare earths that supply will exceed demand,” a top leader informed reporters. This followed in the wake of a request for compensation in the form of natural resources from another country. In September, the authorities in Asia agreed to a contract with an US firm, securing rights to minerals such as antimony and copper.

Prospects for Success

But, is America able to close its gap and loosen China’s hold on rare-earth global networks? “The US has taken major measures already,” a specialist comments. The nation, he continues, cannot be “independent in the short term because it requires years to start operations and establish processing plants.”