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Recently, a top US official came back from a southern state brandishing a small piece of metal, announcing it was the initial rare-earth magnet manufactured in the US in decades.

He indicated 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 the state, he noted, “We’re finally becoming independent again.”

Breaking China’s Dominance in Critical Materials

Ending China’s processing and manufacturing dominance in these minerals, which are essential for some semiconductors, batteries, and armaments, is a major focus for the current US administration. Via tariffs and other strategies, the US is relying on bringing the industry back to domestic facilities.

These tariffs prompted Beijing to limit rare-earth shipments to the US and pushed the administration to sign deals with Australia, a partner, Cambodia, and Japan.

Although the US and China have since reached a trade truce on rare earths, Beijing—with around 70% of global mining and nearly all of international refining—has a head start that may prove challenging to overcome.

“Rare earths are essential for electric motors but also in defense technology that have obvious applications for the military,” says a market analyst. “Any device that has a decent magnet in it uses rare earths.”

No Easy Fix for US Independence

There’s no easy fix for the US to reduce its reliance on Chinese production of minerals critical to defense, semiconductor production, and the transition from traditional energy to renewable sources. According to 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 a key element, used in chip production, and samarium, critical for military applications, China's control over processing rises to almost total. These elements are used in magnets essential for electric engines and power systems in renewable energy, along with applications for mobile devices, advanced lighting, and nuclear reactors.

Extended Timelines and International Resources

Initiatives to cut the US’s dependence on Chinese production 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 an agreement was signed recently, are only in the initial phases of extraction.

“The issue isn't scarcity itself, it’s that Beijing can limit how much is sent abroad,” an analyst explained, noting that obtaining export licenses from China can be a lengthy, difficult process.

The Arctic region, a key area of US attention, and South America, are two other countries with significant rare-earth resources. In the continental US, there are deposits in the West, the Midwest, and Missouri, with the biggest active site located at Mountain Pass, California, not far from a major city.

Federal Efforts and Funding

Recently, the US Department of Defense took on the role of the largest shareholder in an industry operator, with intentions to open a new “mine-to-magnet” plant, named 10X, to make magnets essential for F-35 fighter jets, drones, and submarines.

Across the continent, estimated reserves of rare earths were estimated to include millions of tons in the US and more than 14m tons in Canada—significantly lower than the 44m tons believed to be in the Asian giant.

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

“The US is up against government-backed investment because Beijing is selecting these as priority areas that they aim to control,” a senior official stated during a speech this spring.

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

Past Challenges and Prospects

American attempts to support domestic production have struggled in the past when China lowered prices, making unsupported rare-earth development unprofitable against China’s lower cost of production and far-sighted planning.

Five years ago, an industry leader testified before a congressional panel that “those who invest in battery capacity and supply chains now are poised to dominate this sector for generations to come. There is still time for the US but action is needed now.”

Five years on, a scramble 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 informed the media. This followed eight months after a demand for compensation in the form of minerals from another country. More recently, the government of Pakistan signed a contract with an American company, securing rights to minerals such as key metals.

Can the US Succeed?

However, is America able to close its shortfall and weaken China’s hold on rare-earth global networks? “The US has taken really significant steps so far,” a specialist comments. The nation, he adds, is unlikely to become “independent in the near future because it requires years to start operations and build refining capacity.”