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Recently, the US Treasury Secretary returned from South Carolina holding up a small piece of metal, proclaiming it was the first rare-earth magnet manufactured in the US in a quarter of a century.

He remarked that this was proof the US is overcoming “Beijing's grip on our industrial pipeline.” Because of a new rare-earth mineral processing center in South Carolina, he noted, “The nation is regaining its autonomy.”

Breaking Beijing's Control in Essential Minerals

Overthrowing China’s refining and production supremacy in these materials, which are vital for some semiconductors, energy storage, and armaments, is a key goal for the federal government. Through economic tools and other approaches, the US is relying on returning the industry back to US soil.

These measures led Beijing to restrict rare-earth exports to the US and motivated US leaders to sign deals with an ally, Malaysia, another nation, and a key Asian economy.

Although the US and China have now brokered a trade truce on rare earths, China—with approximately the majority of global mining and nearly all of international refining—has a head start that will be difficult to erode.

“These materials are essential for EV engines but also in guidance systems that have obvious applications for the military,” says an industry expert. “Anything that has a strong magnet in it uses rare earths.”

No Easy Fix 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 traditional energy to renewable sources. According to federal reports, the US brought in the vast majority of the rare earths it consumed in 2024.

For some rare-earth minerals such as dysprosium, essential for semiconductors, and another mineral, essential to military applications, Chinese refinement dominance rises to 99%. These elements are used in magnets crucial to EV motors and power systems in renewable energy, along with uses in mobile devices, high-intensity lighting, and nuclear reactors.

Extended Timelines and Global Deposits

Efforts to cut the US’s reliance on China's output of rare-earth minerals may require a long time. Analysts point out that “Rare earths” is somewhat of a misnomer because they’re not that uncommon in the planet's surface, but many reserves, including those in Eastern Europe, where a deal was made recently, are only in the early stages of extraction.

“The issue isn't scarcity per se, it’s that China can limit how much is sent abroad,” a specialist said, noting that obtaining export licenses from China can be a lengthy, difficult process.

Greenland, another focus of American interest, and Brazil, are two other countries with substantial rare-earth resources. In the continental US, there are deposits in the West, the Midwest, and Missouri, with the largest operational mine operating at a key location, the state, about 60 miles from a major city.

Federal Efforts and Investment

In July, the US Department of Defense took on the role of the major investor in an industry operator, with plans to open a new “integrated” plant, called 10X, to produce magnets crucial for F-35 fighter jets, drones, and naval vessels.

Across the continent, measured and indicated resources of rare earths were estimated to include 3.6m tons in the US and more than 14m tons in the northern neighbor—far less than the 44m tons estimated to be in China.

Following direct investment in the steel industry and US chipmakers, the interior department announced it was ready to make targeted funding in critical mineral companies.

“You’re competing against government-backed investment because China is selecting these as priority areas that they want to invest in,” a cabinet member stated during a address this spring.

The official floated that the US could use a national investment pool to speed production. “Why wouldn’t the wealthiest country in the world not possess the largest state investment fund?” he asked.

Past Challenges and Prospects

American attempts to support domestic production have struggled in the past when Chinese producers cut costs, making unsubsidized rare-earth development uneconomic against China’s lower cost of production and far-sighted planning.

In the past, an industry leader testified before a congressional panel that “those who invest in battery capacity and industrial networks 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.

“Soon, we’ll have so much essential resources that you won’t know what to do with them,” a top leader informed reporters. That came in the wake of a demand for compensation in the form of natural resources from Ukraine. More recently, the authorities in Asia signed a contract with an American company, securing rights to minerals such as antimony and copper.

Can the US Succeed?

However, can the US make up its shortfall and weaken Beijing's grip on rare-earth supply chains? “The US has taken really significant steps already,” a specialist comments. The nation, he continues, cannot be “independent in the near future because it takes time to bring a mine online and build refining capacity.”