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Not long ago, the US Treasury Secretary returned 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 ending “Beijing's grip on our supply chain.” Because of a recently opened rare-earth mineral refining facility in South Carolina, the official continued, “America is reclaiming its self-sufficiency.”

Countering China’s Dominance in Essential Minerals

Reducing Beijing's refining and production supremacy in these minerals, which are crucial for advanced electronics, energy storage, and military equipment, is a key goal for the current US administration. Through trade measures and other strategies, the US is counting on bringing the industry home to American shores.

Such measures prompted Beijing to restrict rare-earth exports to the US and pushed US leaders to sign deals with Australia, Malaysia, another nation, and Japan.

While the US and China have since reached a trade truce on rare earths, China—with approximately the majority of worldwide extraction and over 90% of international refining—holds an advantage that may prove challenging to erode.

“Rare earths are used in EV engines but also in defense technology that have clear uses for the defense department,” notes a market analyst. “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 Chinese production of minerals critical to defense, chip manufacturing, and the shift 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.

In the case of rare-earth minerals such as dysprosium, used in semiconductors, and samarium, essential to defense systems, Chinese refinement dominance rises to 99%. These elements are used in magnets essential for electric engines and generators in wind turbines, along with applications for cellphones, high-intensity lighting, and energy plants.

Long-Term Efforts and Global Deposits

Initiatives to reduce the US’s dependence on China's output of rare-earth minerals could take years. Experts note that “Rare earths” is somewhat of a misnomer because they’re relatively abundant in the earth’s crust, but many reserves, including those in Eastern Europe, where a deal was made recently, are only in the initial phases of mining.

“The issue isn't scarcity per se, it’s that Beijing can limit how much is exported,” an analyst explained, adding that securing export licenses from China can be a complex and time-consuming endeavor.

The Arctic region, another focus of US attention, and South America, are two other countries with substantial rare-earth resources. Domestically, there are reserves in California, Wyoming, and the central US, with the largest operational mine operating at a key location, California, about 60 miles from a major city.

Federal Efforts and Funding

Recently, the US Department of Defense became the major investor in a mining company, with intentions to open a new “mine-to-magnet” plant, called 10X, to make magnets essential for military aircraft, unmanned systems, and submarines.

In North America, measured and indicated resources of rare earths were calculated at millions of tons in the US and additional millions in the northern neighbor—far less than the vast reserves estimated to be in the Asian giant.

Following government funding in other sectors and US chipmakers, the federal agency announced it was ready to make targeted funding in critical mineral companies.

“You’re competing against government-backed investment because China is selecting these strategically that they aim to control,” a cabinet member 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 wealthiest country in the world have the biggest state investment fund?” he questioned.

Historical Obstacles and Future Outlook

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

Five years ago, an industry leader testified before a congressional panel that “nations that fund in energy storage and supply chains now 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 build trading alliances around rare earths is speeding up.

“In about a year from now, we’ll have an abundance of critical mineral and rare earths that supply will exceed demand,” a top leader informed the media. This followed in the wake of a request for payment in the form of natural resources from Ukraine. In September, the authorities in Asia agreed to a deal 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 weaken Beijing's grip on rare-earth global networks? “The US has taken really significant steps so far,” an analyst says. The nation, he continues, is unlikely to become “independent in the near future because it takes time to start operations and build refining capacity.”