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Last week, a top US official returned from a southern state brandishing a small piece of metal, proclaiming it was the initial rare-earth magnet made in the US in 25 years.

He remarked that this was proof the US is breaking “China's dominance on our industrial pipeline.” Because of a new rare-earth mineral manufacturing plant in South Carolina, the official continued, “We’re finally becoming independent again.”

Countering China’s Dominance in Critical Materials

Reducing Beijing's refining and production supremacy in these materials, which are crucial for advanced electronics, energy storage, and military equipment, is a top priority for the current US administration. Through tariffs and other strategies, the US is relying on returning the industry back to American shores.

These tariffs prompted Beijing to limit rare-earth exports to the US and pushed the administration to forge agreements with an ally, a partner, Cambodia, and a key Asian economy.

Although the US and China have now reached a trade truce on rare earths, Beijing—with approximately the majority of worldwide extraction and nearly all of international refining—holds an advantage that will be difficult to overcome.

“These materials are used in EV engines but also in guidance systems that have obvious applications for the defense department,” says a market analyst. “Any device that has a strong magnet in it uses rare earths.”

No Easy Fix for American Self-Sufficiency

It won't be simple for the US to reset its dependence on Chinese production of materials essential to defense, chip manufacturing, and the shift from fossil fuels to renewable sources. According to federal reports, the US imported the vast majority of the rare earths it used in 2024.

For some rare-earth minerals such as dysprosium, essential for chip production, and samarium, critical for defense systems, China's control over processing reaches 99%. Dysprosium and terbium are found in magnets crucial to EV motors and power systems in renewable energy, along with applications for cellphones, advanced lighting, and energy plants.

Long-Term Efforts and Global Deposits

Efforts to reduce the US’s dependence on Chinese production of rare-earth minerals may require a long time. Experts note that “These minerals” is not entirely accurate because they’re relatively abundant in the planet's surface, but many deposits, such as those in Ukraine, where a deal was made recently, are only in the early stages of extraction.

“The issue isn't scarcity itself, it’s that Beijing can limit how much is exported,” an analyst said, adding that securing permits from China can be a lengthy, difficult process.

Greenland, another focus of US attention, and South America, are additional nations with substantial rare-earth deposits. Domestically, there are deposits in the West, Wyoming, and Missouri, with the biggest active site operating at a key location, the state, about 60 miles from a major city.

Government Initiatives and Investment

Recently, the US Department of Defense became the largest shareholder in a mining company, with plans to open a new “mine-to-magnet” plant, named a new facility, to produce magnets crucial for F-35 fighter jets, drones, and submarines.

In North America, measured and indicated resources of rare earths were calculated at 3.6m tons in the US and more than 14m tons in the northern neighbor—significantly lower than the 44m tons estimated to be in China.

Mirroring government funding in other sectors and US chipmakers, the interior department said it was prepared to make direct investments in strategic resource firms.

“You’re competing against government-backed investment because China is picking these as priority areas that they aim to control,” a senior official said during a address in April.

He suggested that the US could use a national investment pool to accelerate production. “How could the richest nation in the world not possess the biggest sovereign wealth fund?” he asked.

Past Challenges and Future Outlook

American attempts to support homegrown output have floundered in the past when China cut costs, rendering unsupported rare-earth development unprofitable against Asia's competitive pricing and long-term strategic outlook.

Five years ago, a market expert testified before a US Senate committee that “nations that fund in energy storage and supply chains today are poised to dominate this industry for the foreseeable future. It is not too late for the US but immediate steps are required.”

Five years on, 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 reporters. That came in the wake of a demand for payment in the form of natural resources from Ukraine. In September, the government of Pakistan signed a deal with an US firm, securing rights to minerals such as key metals.

Can the US Succeed?

But, can the US make up its shortfall and weaken China’s hold on rare-earth global networks? “America has implemented really significant steps so far,” an analyst says. The nation, he continues, is unlikely to become “self-reliant in the short term because it takes time to start operations and establish processing plants.”