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Recently, the US Treasury Secretary returned from a southern state brandishing a tiny sample of metal, announcing it was the first rare-earth magnet produced in the US in a quarter of a century.

He indicated that this was evidence the US is ending “China's dominance on our industrial pipeline.” Due to a recently opened rare-earth mineral manufacturing plant in the state, he noted, “The nation is regaining its autonomy.”

Breaking China’s Dominance in Critical Materials

Reducing China’s processing and manufacturing dominance in these minerals, which are vital for advanced electronics, batteries, and military equipment, is a key goal for the current US administration. Via tariffs and other approaches, the US is relying on bringing the industry home to American shores.

Such measures led Beijing to restrict rare-earth shipments to the US and pushed US leaders to sign deals with an ally, a partner, another nation, and Japan.

While the US and China have since brokered a temporary agreement on rare earths, Beijing—with around the majority of global mining and nearly all of international refining—holds an advantage that may prove challenging to erode.

“These materials are essential for EV engines but also in defense technology that have clear uses for the military,” says a market analyst. “Anything that has a decent magnet in it uses rare earths.”

Challenging Path for US Independence

It won't be simple for the US to reduce its reliance on Chinese production of minerals essential to defense, chip manufacturing, and the transition from traditional energy to wind and solar. According to official sources, the US imported 80% of the rare earths it used in recent years.

For some rare-earth minerals such as dysprosium, essential for semiconductors, and samarium, critical for defense systems, Chinese refinement dominance reaches almost total. Dysprosium and terbium are found in magnets essential for EV motors and power systems in wind turbines, along with uses in cellphones, high-intensity lighting, and nuclear reactors.

Long-Term Efforts and Global Deposits

Initiatives to cut the US’s reliance on Chinese production of rare-earth minerals could take years. Experts note that “These minerals” 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 signed recently, are only in the early stages of extraction.

“It’s not that there’s a shortage itself, it’s that Beijing can control how much is sent abroad,” an analyst explained, adding that obtaining permits from China can be a lengthy, difficult process.

Greenland, another focus of American interest, and South America, are additional nations with significant rare-earth deposits. In the continental US, there are reserves in California, the Midwest, and the central US, with the largest operational mine operating at Mountain Pass, California, about 60 miles from a major city.

Federal Efforts and Investment

Recently, the US Department of Defense took on the role of the largest shareholder in a mining company, with intentions to open a new “integrated” plant, called a new facility, to make magnets crucial for F-35 fighter jets, drones, and naval vessels.

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 Canada—far less than the vast reserves believed to be in China.

Following government funding in the steel industry and domestic technology firms, the federal agency announced it was ready to make targeted funding in strategic resource firms.

“You’re competing against state capital because Beijing is picking these strategically that they aim to control,” a senior official stated during a address this spring.

The official floated that the US could use a sovereign wealth fund to accelerate production. “Why wouldn’t the richest nation in the world not possess the largest sovereign wealth fund?” he asked.

Historical Obstacles and Future Outlook

US efforts to support domestic production have floundered in the past when Chinese producers cut costs, rendering unsupported rare-earth development unprofitable against Asia's competitive pricing and far-sighted planning.

Five years ago, an industry leader stated before a congressional panel that “those who invest in battery capacity and supply chains now are poised to dominate this sector for the foreseeable future. It is not too late for the US but immediate steps are required.”

Five years on, a scramble to build international partnerships around rare earths is accelerating.

“Soon, 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 demand for payment in the form of natural resources from Ukraine. In September, the government of Pakistan agreed to a contract with an US firm, giving it access to minerals such as antimony and copper.

Prospects for Success

However, can the US make up its gap and loosen Beijing's grip on rare-earth supply chains? “The US has taken major measures so far,” a specialist says. The nation, he continues, cannot be “independent in the short term because it requires years to start operations and establish processing plants.”