Not long ago, the US Treasury Secretary came back from South Carolina holding up a tiny sample of metal, announcing it was the first rare-earth magnet made in the US in 25 years.
The official stated that this was a sign the US is breaking “China’s chokehold on our industrial pipeline.” Thanks to a new rare-earth mineral processing center in the state, he added, “America is reclaiming its self-sufficiency.”
Challenging Beijing's Control in Critical Materials
Overthrowing Beijing's processing and manufacturing dominance in these minerals, which are essential for advanced electronics, batteries, and military equipment, is a key goal for the current US administration. Through trade measures and other strategies, the US is relying on bringing the industry home to US soil.
Such measures prompted China to restrict rare-earth shipments to the US and motivated US leaders to forge agreements with an ally, Malaysia, another nation, and a key Asian economy.
While the US and China have now brokered a temporary agreement on rare earths, China—with around 70% of global mining and over 90% of international refining—has a head start that will be difficult to diminish.
“These materials are used in EV engines but also in defense technology that have clear uses for the military,” says an industry expert. “Any device that has a strong magnet in it requires rare earths.”
Challenging Path for American Self-Sufficiency
There’s no easy fix for the US to reset its dependence on imports from China of minerals critical to national security, semiconductor production, and the shift from fossil fuels to renewable sources. Data from federal reports, the US brought in the vast majority of the rare earths it consumed in 2024.
In the case of rare-earth minerals such as dysprosium, essential for semiconductors, and another mineral, essential to military applications, China's control over processing rises to 99%. Dysprosium and terbium are found in magnets crucial to EV motors and power systems in wind turbines, along with applications for mobile devices, high-intensity lighting, and energy plants.
Extended Timelines and International Resources
Initiatives to reduce the US’s reliance on Chinese production of rare-earth minerals could take years. Analysts point out that “These minerals” is somewhat of a misnomer because they’re relatively abundant in the planet's surface, but many reserves, such as those in Ukraine, where an agreement was signed earlier this year, are only in the initial phases of extraction.
“The issue isn't scarcity itself, it’s that China can limit how much is exported,” a specialist said, noting that securing permits from China can be a lengthy, difficult process.
Greenland, a key area of American interest, and Brazil, are additional nations with significant rare-earth deposits. Domestically, there are reserves in California, Wyoming, and the central US, with the largest operational mine 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 an industry operator, with plans to open a new “mine-to-magnet” plant, named a new facility, to produce magnets crucial for military aircraft, drones, and submarines.
Across the continent, measured and indicated resources of rare earths were calculated at 3.6m tons in the US and additional millions in Canada—significantly lower than the vast reserves estimated to be in China.
Mirroring government funding in the steel industry and US chipmakers, the federal agency announced it was prepared to make direct investments in strategic resource firms.
“The US is up against government-backed investment because Beijing is selecting these strategically that they want to invest in,” a senior official said during a address this spring.
The official suggested that the US could utilize a sovereign wealth fund to speed 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 floundered in the past when China lowered prices, rendering unsupported rare-earth development unprofitable against China’s lower cost of production and far-sighted planning.
Five years ago, a market expert stated before a US Senate committee that “nations that fund in energy storage and industrial networks now are poised to lead this industry for the foreseeable future. There is still time for the US but action is needed now.”
Five years on, a race to build trading alliances around rare earths is accelerating.
“Soon, we’ll have so much essential resources that supply will exceed demand,” the President informed the media. This followed eight months after a demand for payment in the form of minerals from another country. More recently, the government of Pakistan agreed to a deal with an American company, securing rights to minerals such as key metals.
Can the US Succeed?
But, can the US make up its shortfall and loosen China’s hold on rare-earth supply chains? “The US has taken major measures already,” a specialist comments. The US, he continues, cannot be “self-reliant in the short term because it takes time to start operations and build refining capacity.”
