Last week, a top US official returned from South Carolina displaying a tiny sample of metal, announcing it was the initial rare-earth magnet manufactured in the US in 25 years.
The official stated that this was proof the US is overcoming “China's dominance on our industrial pipeline.” Thanks to a recently opened rare-earth mineral manufacturing plant in the state, the official continued, “We’re finally becoming independent again.”
Breaking China’s Dominance in Critical Materials
Ending China’s processing and manufacturing dominance in these materials, which are essential for advanced electronics, energy storage, and military equipment, is a major focus for the current US administration. Via tariffs and other strategies, the US is relying on bringing the industry back to US soil.
These tariffs led Beijing to limit rare-earth shipments to the US and motivated the administration to sign deals with an ally, Malaysia, Cambodia, and Japan.
While the US and China have since brokered a trade truce on rare earths, China—with approximately the majority of worldwide extraction and over 90% of international refining—has a head start that will be difficult to diminish.
“These materials are essential for EV engines but also in guidance systems that have clear uses for the military,” notes a market analyst. “Anything that has a strong magnet in it uses rare earths.”
No Easy Fix for American Self-Sufficiency
It won't be simple for the US to reduce its dependence on Chinese production of materials essential to defense, chip manufacturing, and the transition from fossil fuels to renewable sources. Data from federal reports, the US imported 80% of the rare earths it used in 2024.
For some rare-earth minerals such as dysprosium, used in chip production, and another mineral, critical for defense systems, China's control over processing reaches almost total. Dysprosium and terbium are found in magnets essential for EV motors and generators in renewable energy, along with applications for mobile devices, advanced lighting, and energy plants.
Long-Term Efforts and International Resources
Efforts to reduce the US’s reliance on China's output of rare-earth minerals may require a long time. Experts note that “Rare earths” is not entirely accurate because they’re not that uncommon in the planet's surface, but many deposits, including those in Ukraine, where a deal was made 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 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 American interest, and South America, are two other countries with significant rare-earth resources. Domestically, there are reserves in California, the Midwest, and the central US, with the biggest active site operating at Mountain Pass, the state, not far from Las Vegas.
Federal Efforts and Funding
Recently, the US Department of Defense took on the role of the major investor in an industry operator, with plans to open a new “mine-to-magnet” plant, named 10X, to produce magnets crucial for military aircraft, drones, and naval vessels.
In North America, estimated reserves of rare earths were estimated to include millions of tons in the US and additional millions in the northern neighbor—far less than the 44m tons believed to be in China.
Following government funding in other sectors and US chipmakers, the interior department announced it was ready 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 stated during a speech this spring.
The official suggested that the US could use a sovereign wealth fund to accelerate production. “Why wouldn’t the wealthiest country in the world have the largest state investment fund?” he asked.
Past Challenges and Prospects
American attempts to support homegrown output have floundered in the past when China lowered prices, rendering unsubsidized rare-earth development uneconomic against Asia's competitive pricing and long-term strategic outlook.
In the past, an industry leader testified before a US Senate committee that “nations that fund in battery capacity and supply chains today are likely to lead this sector for generations to come. There is still time for the US but action is needed now.”
Since then, a race to build trading alliances around rare earths is speeding up.
“Soon, we’ll have an abundance of essential resources that supply will exceed demand,” the President informed the media. That came eight months after a demand for compensation in the form of minerals from another country. In September, the authorities in Asia agreed to a deal with an US firm, giving it access to minerals such as antimony and copper.
Can the US Succeed?
However, is America able to close its shortfall and weaken Beijing's grip on rare-earth global networks? “The US has taken major measures already,” a specialist says. The nation, he adds, cannot be “independent in the near future because it requires years to bring a mine online and establish processing plants.”
