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Not long ago, the US Treasury Secretary came back from a southern state displaying a tiny sample of metal, proclaiming it was the first rare-earth magnet produced in the US in a quarter of a century.

He indicated that this was a sign the US is breaking “China’s chokehold on our supply chain.” Due to a recently opened rare-earth mineral manufacturing plant in the state, he noted, “The nation is regaining its autonomy.”

Countering China’s Dominance in Essential Minerals

Overthrowing Beijing's refining and production supremacy in these materials, which are essential for some semiconductors, batteries, and armaments, is a top priority for the federal government. Using tariffs and other approaches, the US is betting on bringing the industry back to American shores.

These measures prompted China to limit rare-earth exports to the US and pushed the administration to forge agreements with Australia, Malaysia, another nation, and Japan.

While the US and China have now reached a trade truce on rare earths, China—with approximately 70% of global mining and over 90% of international refining—has a head start that may prove challenging to overcome.

“Rare earths are used in EV engines but also in guidance systems that have clear uses for the military,” says a market analyst. “Anything that has a decent magnet in it requires rare earths.”

Challenging Path for American Self-Sufficiency

It won't be simple for the US to reduce its reliance on Chinese production of minerals critical to national security, semiconductor production, 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 2024.

For some rare-earth minerals such as dysprosium, used in chip production, and another mineral, critical for military applications, Chinese refinement dominance rises to 99%. These elements are used in magnets essential for electric engines and power systems in renewable energy, along with uses in cellphones, advanced lighting, and energy plants.

Long-Term Efforts and International Resources

Initiatives to reduce the US’s reliance on Chinese production of rare-earth minerals may require a long time. Experts note that “Rare earths” is not entirely accurate because they’re not that uncommon 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 mining.

“The issue isn't scarcity per se, it’s that China can control how much is exported,” an analyst explained, adding that securing export licenses from China can be a lengthy, difficult process.

The Arctic region, a key area of US attention, and Brazil, 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 Mountain Pass, the state, not far from Las Vegas.

Government Initiatives and Funding

In July, the US Department of Defense became the largest shareholder in an industry operator, with intentions to open a new “mine-to-magnet” plant, called a new facility, to produce magnets crucial for military aircraft, unmanned systems, and submarines.

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

Following government funding in the steel industry and domestic technology firms, the federal agency said it was ready to make targeted funding in critical mineral companies.

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

He floated that the US could utilize a national investment pool to accelerate production. “Why wouldn’t the wealthiest country in the world have the largest sovereign wealth fund?” he questioned.

Historical Obstacles and Prospects

American attempts to support domestic production have struggled in the past when Chinese producers lowered prices, making unsubsidized rare-earth development uneconomic against Asia's competitive pricing and long-term strategic outlook.

Five years ago, a market expert testified before a congressional panel that “nations that fund in energy storage and industrial networks now are likely to lead this industry for the foreseeable future. It is not too late for the US but action is needed now.”

Five years on, a race to build trading alliances around rare earths is accelerating.

“Soon, we’ll have so much critical mineral and rare earths that supply will exceed demand,” a top leader told the media. That came eight months after a request for payment in the form of minerals from another country. In September, the authorities in Asia agreed to a contract with an American company, securing rights to minerals such as antimony and copper.

Prospects for Success

However, can the US make up its shortfall and weaken Beijing's grip on rare-earth global networks? “America has implemented major measures so far,” a specialist says. The US, he continues, cannot be “independent in the near future because it takes time to start operations and establish processing plants.”