Not long ago, the US Treasury Secretary came back from a southern state brandishing a tiny sample of metal, proclaiming it was the initial rare-earth magnet made in the US in a quarter of a century.
The official stated that this was a sign the US is breaking “China's dominance on our industrial pipeline.” Because of a recently opened rare-earth mineral manufacturing plant in the state, he added, “America is reclaiming its self-sufficiency.”
Challenging Beijing's Control in Essential Minerals
Reducing China’s processing and manufacturing dominance in these materials, which are essential for advanced electronics, energy storage, and armaments, is a major focus for the federal government. Using tariffs and other strategies, the US is relying on bringing the industry back to US soil.
Such tariffs led China to limit rare-earth shipments to the US and motivated the administration to forge agreements with an ally, a partner, Cambodia, and Japan.
While the US and China have now brokered a trade truce on rare earths, Beijing—with around 70% of global mining and over 90% of international refining—has a head start that may prove challenging to overcome.
“Rare earths are essential for EV engines but also in defense technology that have obvious applications for the military,” says an industry expert. “Any device that has a strong magnet in it requires rare earths.”
Challenging Path for US Independence
There’s no easy fix for the US to reset its reliance on imports from China of materials critical to national security, semiconductor production, and the transition from fossil fuels to renewable sources. Data from federal reports, the US imported the vast majority of the rare earths it consumed in 2024.
In the case of rare-earth minerals such as dysprosium, essential for chip production, and another mineral, critical for defense systems, China's control over processing reaches almost total. These elements are used in magnets essential for electric engines and power systems in wind turbines, along with uses in cellphones, high-intensity lighting, and energy plants.
Long-Term Efforts and International Resources
Efforts to cut the US’s dependence 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 reserves, including those in Eastern Europe, where an agreement was made recently, are only in the initial phases of mining.
“The issue isn't scarcity itself, it’s that China can limit how much is exported,” an analyst explained, noting that obtaining export licenses from China can be a lengthy, difficult process.
The Arctic region, a key area of American interest, and Brazil, are two other countries with significant rare-earth resources. Domestically, there are reserves in the West, Wyoming, and Missouri, with the biggest active site operating at a key location, the state, about 60 miles from Las Vegas.
Government Initiatives and Funding
In July, the Pentagon took on the role of the largest shareholder in a mining company, with plans to open a new “integrated” plant, named 10X, to produce magnets essential for military aircraft, unmanned systems, and naval vessels.
Across the continent, estimated reserves of rare earths were calculated at 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 other sectors and US chipmakers, the interior department said it was prepared to make direct investments in critical mineral companies.
“You’re competing against government-backed investment because Beijing is selecting these strategically that they aim to control,” a senior official stated during a address in April.
He floated that the US could use a sovereign wealth fund to speed production. “Why wouldn’t the richest nation in the world have the biggest state investment fund?” he questioned.
Past Challenges and Future Outlook
US efforts to promote homegrown output have floundered in the past when China lowered prices, rendering unsubsidized rare-earth development uneconomic against Asia's competitive pricing and long-term strategic outlook.
Five years ago, a market expert stated before a US Senate committee that “those who invest in energy storage and supply chains now are poised to dominate this industry 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 accelerating.
“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 told reporters. That came eight months after a request for compensation in the form of minerals from Ukraine. More recently, the authorities in Asia signed a contract with an US firm, giving it access to minerals such as antimony and copper.
Can the US Succeed?
However, can the US make up its shortfall and weaken China’s hold on rare-earth supply chains? “America has implemented major measures already,” a specialist says. The nation, he adds, cannot be “self-reliant in the short term because it takes time to start operations and establish processing plants.”
