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Recently, the US Treasury Secretary came back from a southern state displaying a small piece of metal, announcing it was the initial rare-earth magnet made in the US in 25 years.

He indicated that this was proof the US is ending “China's dominance on our supply chain.” Thanks to a recently opened rare-earth mineral refining facility in the state, the official continued, “We’re finally becoming independent again.”

Challenging China’s Dominance in Critical Materials

Overthrowing China’s processing and manufacturing dominance in these materials, which are vital for some semiconductors, energy storage, and armaments, is a key goal for the American leadership. Through economic tools and other approaches, the US is relying on bringing the industry home to American shores.

These measures prompted China to limit rare-earth shipments to the US and motivated US leaders to sign deals with Australia, Malaysia, another nation, and a key Asian economy.

Although the US and China have since reached a trade truce on rare earths, China—with around 70% of worldwide extraction and over 90% of international refining—has a head start that will be difficult to overcome.

“These materials are essential for electric motors but also in guidance systems that have obvious applications for the military,” notes an industry expert. “Anything that has a decent magnet in it requires rare earths.”

No Easy Fix for American Self-Sufficiency

There’s no easy fix for the US to reset its dependence on Chinese production of minerals essential to national security, chip manufacturing, and the transition from traditional energy to renewable sources. According to official sources, the US brought in the vast majority of the rare earths it consumed in 2024.

In the case of rare-earth minerals such as a key element, used in semiconductors, and another mineral, essential to defense systems, China's control over processing rises to 99%. These elements are found in magnets crucial to EV motors and generators in wind turbines, along with uses in mobile devices, advanced lighting, and nuclear reactors.

Long-Term Efforts and Global Deposits

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 relatively abundant in the earth’s crust, but many deposits, such as those in Ukraine, where a deal was made earlier this year, are only in the initial phases of mining.

“The issue isn't scarcity per se, it’s that China can limit how much is sent abroad,” a specialist said, noting that obtaining permits 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 significant rare-earth deposits. In the continental US, there are deposits in the West, the Midwest, and the central US, with the largest operational mine operating at a key location, California, about 60 miles from a major city.

Government Initiatives and Funding

In July, the US Department of Defense became the major investor in an industry operator, with plans to open a new “mine-to-magnet” plant, named a new facility, to produce magnets crucial for military aircraft, drones, and naval vessels.

In North America, estimated reserves of rare earths were calculated at millions of tons in the US and additional millions in Canada—significantly lower than the vast reserves believed to be in the Asian giant.

Mirroring government funding in the steel industry and US chipmakers, the federal agency said it was prepared to make targeted funding in strategic resource firms.

“You’re competing against state capital because China is selecting these strategically that they want to invest in,” a senior official said during a speech in April.

He floated that the US could utilize a national investment pool to speed production. “Why wouldn’t the richest nation in the world not possess the largest state investment fund?” he questioned.

Historical Obstacles and Prospects

American attempts to promote domestic production have floundered in the past when Chinese producers cut costs, making unsupported rare-earth development uneconomic against Asia's competitive pricing and long-term strategic outlook.

Five years ago, an industry leader testified before a congressional panel that “those who invest in energy storage and supply chains now are poised 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 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,” the President told the media. This followed eight months after a demand for compensation in the form of natural resources from Ukraine. More recently, 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?

But, can the US make up its gap and loosen China’s hold on rare-earth global networks? “The US has taken major measures so far,” an analyst says. The US, he continues, is unlikely to become “self-reliant in the short term because it requires years to bring a mine online and build refining capacity.”