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Last week, a top US official returned from a southern state holding up a small piece of metal, declaring it was the first rare-earth magnet manufactured in the US in decades.

He indicated that this was proof the US is overcoming “Beijing's grip on our industrial pipeline.” Thanks to a recently opened rare-earth mineral refining facility in the state, he noted, “We’re finally becoming independent again.”

Countering China’s Dominance in Critical Materials

Overthrowing China’s refining and production supremacy in these minerals, which are essential for some semiconductors, batteries, and armaments, is a top priority for the current US administration. Using economic tools and other approaches, the US is relying on bringing the industry back to domestic facilities.

Such measures led China to restrict rare-earth shipments to the US and motivated US leaders to forge agreements with an ally, Malaysia, Cambodia, and a key Asian economy.

Although the US and China have now reached a temporary agreement on rare earths, Beijing—with around the majority of worldwide extraction and nearly all of international refining—holds an advantage that may prove challenging to overcome.

“Rare earths are used in electric motors but also in defense technology that have clear uses for the military,” says an industry expert. “Anything that has a strong magnet in it uses rare earths.”

No Easy Fix for American Self-Sufficiency

There’s no easy fix for the US to reset its reliance on Chinese production of materials critical to defense, chip manufacturing, and the shift from traditional energy to wind and solar. Data from 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 chip production, and samarium, essential to military applications, China's control over processing rises to 99%. These elements are used in magnets essential for EV motors and generators in wind turbines, along with uses in mobile devices, high-intensity lighting, and nuclear reactors.

Extended Timelines and International Resources

Efforts to reduce the US’s reliance on Chinese production of rare-earth minerals may require a long time. Experts note that “These minerals” is not entirely accurate because they’re not that uncommon in the earth’s crust, but many reserves, such as those in Eastern Europe, where an agreement was signed earlier this year, are only in the initial phases of mining.

“It’s not that there’s a shortage per se, it’s that Beijing can control how much is exported,” a specialist said, noting that obtaining export licenses from China can be a complex and time-consuming endeavor.

Greenland, a key area of American interest, and Brazil, are additional nations with significant rare-earth deposits. Domestically, there are reserves in California, the Midwest, and Missouri, with the biggest active site operating at a key location, California, not far from a major city.

Government Initiatives and Investment

Recently, the US Department of Defense became the major investor in a mining company, with intentions to open a new “integrated” plant, called 10X, to make magnets essential for F-35 fighter jets, drones, and naval vessels.

In North America, estimated reserves of rare earths were estimated to include 3.6m tons in the US and more than 14m tons in Canada—significantly lower than the vast reserves estimated to be in the Asian giant.

Following government funding in the steel industry and domestic technology firms, the federal agency said it was prepared to make direct investments in critical mineral companies.

“You’re competing against government-backed investment because China is picking these strategically that they aim to control,” a cabinet member stated during a address this spring.

He floated that the US could utilize a sovereign wealth fund to accelerate production. “Why wouldn’t the wealthiest country in the world not possess the largest sovereign wealth fund?” he asked.

Past Challenges and Future Outlook

American attempts to promote homegrown output have floundered in the past when Chinese producers cut costs, rendering unsubsidized rare-earth development unprofitable against Asia's competitive pricing and far-sighted planning.

In the past, an industry leader testified before a US Senate committee that “nations that fund in energy storage and supply chains now are likely to dominate this industry for generations to come. There is still time for the US but action is needed now.”

Five years on, a race to assemble trading alliances around rare earths is accelerating.

“Soon, we’ll have so much essential resources that supply will exceed demand,” a top leader told the media. That came in the wake of a request for compensation in the form of minerals from another country. More recently, the authorities in Asia agreed to a contract with an US firm, securing rights to minerals such as antimony and copper.

Can the US Succeed?

But, is America able to close its gap and weaken China’s hold on rare-earth supply chains? “The US has taken major measures already,” a specialist comments. The nation, he adds, cannot be “self-reliant in the short term because it takes time to bring a mine online and establish processing plants.”