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Last week, the US Treasury Secretary came back from South Carolina holding up a small piece of metal, declaring it was the first rare-earth magnet made in the US in 25 years.

The official stated that this was proof the US is overcoming “China's dominance on our industrial pipeline.” Because of a new rare-earth mineral refining facility in the state, the official continued, “The nation is regaining its autonomy.”

Challenging China’s Dominance in Essential Minerals

Reducing China’s processing and manufacturing dominance in these materials, which are vital for some semiconductors, batteries, and military equipment, is a key goal for the American leadership. Using tariffs and other approaches, the US is counting on returning the industry home to US soil.

These measures prompted Beijing to limit rare-earth shipments to the US and motivated the administration to forge agreements with Australia, Malaysia, another nation, and a key Asian economy.

Although the US and China have since brokered a temporary agreement on rare earths, Beijing—with approximately 70% of global mining and over 90% of international refining—has a head start that may prove challenging to erode.

“These materials are used in electric motors but also in defense technology 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

It won't be simple for the US to reduce its reliance on imports from China of minerals critical to national security, semiconductor production, and the transition from fossil fuels to wind and solar. Data from federal reports, the US imported 80% of the rare earths it used in 2024.

In the case of rare-earth minerals such as a key element, used in semiconductors, and another mineral, essential to military applications, China's control over processing reaches 99%. These elements are found in magnets essential for electric engines and generators in renewable energy, along with applications for mobile devices, high-intensity lighting, and nuclear reactors.

Long-Term Efforts and International Resources

Efforts to reduce the US’s dependence on Chinese production of rare-earth minerals may require a long time. Analysts point out that “These minerals” is somewhat of a misnomer because they’re relatively abundant in the earth’s crust, but many deposits, including those in Ukraine, where a deal was signed earlier this year, are only in the early stages of mining.

“It’s not that there’s a shortage itself, it’s that China can control how much is sent abroad,” a specialist explained, adding that obtaining permits from China can be a complex and time-consuming endeavor.

Greenland, a key area of American interest, and South America, are additional nations with significant rare-earth resources. In the continental US, there are deposits in California, Wyoming, and Missouri, with the biggest active site operating at a key location, the state, about 60 miles from a major city.

Federal Efforts and Investment

Recently, the Pentagon became the largest shareholder in an industry operator, with intentions to open a new “mine-to-magnet” plant, named 10X, to produce magnets crucial for F-35 fighter jets, unmanned systems, and naval vessels.

Across the continent, measured and indicated resources of rare earths were calculated at 3.6m tons in the US and additional millions in the northern neighbor—far less than the 44m tons 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 targeted funding in strategic resource firms.

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

He 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 biggest state investment fund?” he asked.

Historical Obstacles and Future Outlook

US efforts to promote domestic production have struggled in the past when China cut costs, making unsupported rare-earth development uneconomic against Asia's competitive pricing and far-sighted planning.

Five years ago, an industry leader testified before a congressional panel that “those who invest in energy storage and supply chains today are likely to dominate this sector for generations to come. There is still time for the US but immediate steps are required.”

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

“Soon, we’ll have an abundance of critical mineral and rare earths that you won’t know what to do with them,” the President told the media. This followed eight months after a request for payment in the form of natural resources from Ukraine. More recently, the authorities in Asia signed a contract with an American company, giving it access to minerals such as antimony and copper.

Can the US Succeed?

But, can the US make up its shortfall and loosen China’s hold on rare-earth supply chains? “America has implemented major measures already,” a specialist comments. The nation, he continues, is unlikely to become “independent in the short term because it requires years to start operations and establish processing plants.”