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Last week, the US Treasury Secretary came back from South Carolina brandishing a small piece of metal, declaring it was the first rare-earth magnet produced in the US in a quarter of a century.

He indicated that this was evidence the US is overcoming “China's dominance on our industrial pipeline.” Because of a recently opened rare-earth mineral refining facility in the state, he added, “America is reclaiming its self-sufficiency.”

Breaking Beijing's Control in Essential Minerals

Overthrowing China’s processing and manufacturing dominance in these materials, which are vital for advanced electronics, batteries, and armaments, is a major focus for the American leadership. Using economic tools and other approaches, the US is counting on returning the industry home to US soil.

These tariffs led China to limit rare-earth exports to the US and pushed the administration to forge agreements with an ally, a partner, Cambodia, and Japan.

Although the US and China have now reached a temporary agreement on rare earths, Beijing—with approximately the majority of global mining and nearly all of international refining—holds an advantage that will be difficult to erode.

“These materials are used in electric motors but also in guidance systems that have obvious applications for the defense department,” says an industry expert. “Any device that has a decent magnet in it uses rare earths.”

No Easy Fix for American Self-Sufficiency

There’s no easy fix for the US to reduce its reliance on imports from China of minerals critical to defense, semiconductor production, and the transition from fossil fuels to renewable sources. According to official sources, the US imported 80% of the rare earths it consumed in 2024.

For some rare-earth minerals such as a key element, used in semiconductors, and another mineral, critical for defense systems, China's control over processing reaches almost total. Dysprosium and terbium are used in magnets crucial to EV motors and power systems in renewable energy, along with uses in mobile devices, high-intensity lighting, and energy plants.

Extended Timelines and Global Deposits

Initiatives to reduce the US’s reliance on China's output of rare-earth minerals could take years. Analysts point out that “Rare earths” is somewhat of a misnomer because they’re relatively abundant in the planet's surface, but many deposits, such as those in Ukraine, where an agreement was made recently, are only in the initial phases of extraction.

“It’s not that there’s a shortage per se, it’s that China can control how much is sent abroad,” a specialist explained, noting that obtaining permits from China can be a complex and time-consuming endeavor.

The Arctic region, a key area of American interest, and South America, are additional nations with substantial rare-earth resources. In the continental US, there are reserves in California, the Midwest, and Missouri, with the largest operational mine operating at Mountain Pass, the state, not far from a major city.

Federal Efforts and Funding

Recently, the US Department of Defense became the major investor in a mining company, with plans to open a new “integrated” plant, named a new facility, to produce magnets essential for military aircraft, drones, and submarines.

Across the continent, measured and indicated resources of rare earths were estimated to include millions of tons in the US and additional millions in Canada—far less than the 44m tons believed to be in the Asian giant.

Following government funding in other sectors and domestic technology firms, the federal agency said it was ready to make direct investments in critical mineral companies.

“The US is up against state capital because Beijing is selecting these as priority areas that they want to invest in,” a senior official stated during a speech this spring.

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

Historical Obstacles and Prospects

American attempts to support homegrown output have struggled in the past when Chinese producers cut costs, rendering unsupported rare-earth development unprofitable against China’s lower cost of production and far-sighted planning.

In the past, a market expert stated before a congressional panel that “those who invest in battery capacity and industrial networks now are poised to dominate this sector for generations to come. 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.

“Soon, we’ll have an abundance of critical mineral and rare earths that you won’t know what to do with them,” a top leader told the media. This followed eight months after a demand for compensation in the form of natural resources from Ukraine. In September, the authorities in Asia signed a contract with an American company, giving it access to minerals such as key metals.

Can the US Succeed?

But, is America able to close its shortfall and loosen Beijing's grip on rare-earth supply chains? “The US has taken really significant steps so far,” a specialist comments. The US, he adds, cannot be “self-reliant in the short term because it requires years to start operations and establish processing plants.”