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Not long ago, 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 produced in the US in decades.

The official stated that this was proof the US is ending “Beijing's grip on our industrial pipeline.” Due to a recently opened rare-earth mineral processing center in South Carolina, the official continued, “The nation is regaining its autonomy.”

Countering China’s Dominance in Essential Minerals

Overthrowing China’s refining and production supremacy in these minerals, which are vital for some semiconductors, batteries, and military equipment, is a key goal for the American leadership. Using economic tools and other approaches, the US is counting on returning the industry home to American shores.

These tariffs prompted Beijing to restrict rare-earth exports to the US and pushed the administration to forge agreements with Australia, a partner, Cambodia, and a key Asian economy.

Although the US and China have now reached a temporary agreement on rare earths, Beijing—with approximately the majority of worldwide extraction and nearly all of global processing capacity—has a head start that may prove challenging to diminish.

“Rare earths are essential for electric motors but also in defense technology that have obvious applications for the military,” notes a market analyst. “Anything that has a decent magnet in it requires rare earths.”

Challenging Path for American Self-Sufficiency

It won't be simple for the US to reset its dependence on Chinese production of minerals critical to defense, semiconductor production, and the transition from traditional energy to renewable sources. Data from official sources, the US brought in the vast majority of the rare earths it used in 2024.

In the case of rare-earth minerals such as dysprosium, used in semiconductors, and another mineral, critical for military applications, Chinese refinement dominance reaches 99%. These elements are used in magnets crucial to electric engines and power systems in wind turbines, along with applications for cellphones, high-intensity lighting, and energy plants.

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 “Rare earths” is somewhat of a misnomer because they’re not that uncommon in the planet's surface, but many reserves, such as those in Eastern Europe, where a deal was made recently, are only in the early stages of extraction.

“The issue isn't scarcity itself, it’s that China can limit how much is sent abroad,” an analyst explained, noting that securing permits from China can be a lengthy, difficult process.

The Arctic region, another focus of US attention, and Brazil, are additional nations with substantial rare-earth resources. In the continental US, there are deposits in the West, Wyoming, and Missouri, with the largest operational mine located at Mountain Pass, the state, about 60 miles from a major city.

Federal Efforts and Funding

Recently, the US Department of Defense became the largest shareholder in a mining company, with intentions to open a new “integrated” plant, named 10X, to produce magnets essential for F-35 fighter jets, unmanned systems, and naval vessels.

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 the northern neighbor—significantly lower than the 44m tons believed to be in China.

Mirroring direct investment in the steel industry and US chipmakers, the interior department announced it was prepared to make direct investments in strategic resource firms.

“The US is up against government-backed investment because Beijing is picking these as priority areas that they aim to control,” a senior official said during a address this spring.

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

Past Challenges and Prospects

American attempts to promote domestic production have struggled in the past when Chinese producers lowered prices, making unsupported rare-earth development unprofitable against Asia's competitive pricing and long-term strategic outlook.

Five years ago, an industry leader stated before a US Senate committee that “those who invest in energy storage and supply chains today are poised to dominate this industry for the foreseeable future. There is still time for the US but immediate steps are required.”

Five years on, a scramble to assemble 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 supply will exceed demand,” the President informed reporters. That came eight months after a request for compensation in the form of minerals from another country. More recently, the government of Pakistan agreed to a deal with an US firm, giving it access to minerals such as antimony and copper.

Can the US Succeed?

But, is America able to close its shortfall and weaken China’s hold on rare-earth supply chains? “America has implemented really significant steps so far,” a specialist says. The nation, he adds, is unlikely to become “independent in the short term because it takes time to start operations and establish processing plants.”