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Recently, the US Treasury Secretary returned from a southern state brandishing a tiny sample of metal, announcing it was the initial rare-earth magnet made in the US in decades.

He indicated that this was a sign the US is breaking “China's dominance on our industrial pipeline.” Thanks to a recently opened rare-earth mineral manufacturing plant in South Carolina, he added, “America is reclaiming its self-sufficiency.”

Challenging Beijing's Control in Critical Materials

Reducing Beijing's processing and manufacturing dominance in these minerals, which are vital for advanced electronics, batteries, and military equipment, is a key goal for the American leadership. Through trade measures and other approaches, the US is counting on returning the industry home to American shores.

Such measures prompted China to limit rare-earth shipments to the US and pushed the administration to forge agreements with Australia, a partner, Cambodia, and Japan.

Although the US and China have since reached a trade truce on rare earths, Beijing—with approximately the majority of global mining and over 90% of international refining—has a head start that may prove challenging to diminish.

“Rare earths are essential for electric motors 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 reduce its reliance on Chinese production of materials critical to national security, semiconductor production, and the transition from traditional energy to wind and solar. According to official sources, the US imported the vast majority of the rare earths it used in 2024.

For some rare-earth minerals such as dysprosium, used in semiconductors, and samarium, essential to military applications, China's control over processing rises to almost total. These elements are used in magnets crucial to EV motors and power systems in renewable energy, along with uses in mobile devices, advanced lighting, and energy plants.

Long-Term Efforts and Global Deposits

Initiatives to cut the US’s reliance on Chinese production of rare-earth minerals could take years. Experts note that “Rare earths” is not entirely accurate because they’re relatively abundant in the earth’s crust, but many reserves, such as those in Ukraine, where an agreement was signed earlier this year, are only in the early stages of extraction.

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

Greenland, a key area of US attention, and South America, are two other countries with substantial rare-earth deposits. Domestically, there are reserves in California, the Midwest, and Missouri, with the largest operational mine operating at a key location, California, not far from Las Vegas.

Federal Efforts and Investment

In July, the US Department of Defense took on the role of the largest shareholder in a mining company, with intentions to open a new “integrated” plant, called 10X, to produce magnets crucial for F-35 fighter jets, unmanned systems, and submarines.

In North America, measured and indicated resources of rare earths were estimated to include millions of tons in the US and more than 14m tons in Canada—far less than the 44m tons estimated to be in the Asian giant.

Following direct investment in the steel industry and domestic technology firms, the interior department announced it was prepared to make direct investments in strategic resource firms.

“The US is up against state capital because Beijing is selecting these as priority areas that they aim to control,” a cabinet member said during a speech in April.

He suggested that the US could use a sovereign wealth fund to accelerate production. “Why wouldn’t the wealthiest country in the world have the biggest sovereign wealth fund?” he asked.

Historical Obstacles and Future Outlook

American attempts to support homegrown output have floundered in the past when Chinese producers lowered prices, rendering unsubsidized rare-earth development uneconomic against China’s lower cost of production and far-sighted planning.

In the past, an industry leader stated before a US Senate committee that “those who invest in battery capacity and supply chains today are poised to lead this industry for the foreseeable future. There is still time for the US but immediate steps are required.”

Since then, a race to assemble international partnerships around rare earths is speeding up.

“In about a year from now, we’ll have so much essential resources that you won’t know what to do with them,” the President told the media. That came eight months after a demand for payment in the form of minerals from another country. More recently, the authorities in Asia signed a contract with an American company, securing rights to minerals such as key metals.

Prospects for Success

But, is America able to close its gap and loosen Beijing's grip on rare-earth supply chains? “The US has taken really significant steps so far,” an analyst says. The US, he continues, cannot be “self-reliant in the near future because it takes time to start operations and establish processing plants.”