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Recently, the US Treasury Secretary came back from a southern state brandishing a small piece of metal, declaring it was the first rare-earth magnet manufactured in the US in a quarter of a century.

He indicated that this was proof the US is ending “Beijing's grip on our industrial pipeline.” Thanks to a new rare-earth mineral processing center in the state, he added, “America is reclaiming its self-sufficiency.”

Challenging China’s Dominance in Critical Materials

Ending China’s processing and manufacturing dominance in these materials, which are essential for advanced electronics, energy storage, and armaments, is a top priority for the federal government. Using economic tools and other strategies, the US is relying on returning the industry home to US soil.

Such tariffs prompted Beijing to restrict rare-earth exports to the US and pushed US leaders to sign deals with Australia, a partner, another nation, and a key Asian economy.

Although the US and China have now brokered a trade truce on rare earths, China—with around the majority of global mining and nearly all of global processing capacity—holds an advantage that will be difficult to erode.

“Rare earths are used in electric motors but also in defense technology that have obvious applications for the military,” notes an industry expert. “Any device that has a strong magnet in it requires rare earths.”

Challenging Path for American Self-Sufficiency

There’s no easy fix for the US to reset its reliance on Chinese production of materials critical to national security, chip manufacturing, and the transition from fossil fuels to renewable sources. Data from official sources, the US imported 80% of the rare earths it consumed in 2024.

For some rare-earth minerals such as dysprosium, essential for chip production, and another mineral, critical for military applications, China's control over processing rises to almost total. These elements are found in magnets crucial to electric engines and generators in renewable energy, along with applications for mobile devices, high-intensity lighting, and nuclear reactors.

Extended Timelines and Global Deposits

Initiatives to reduce the US’s reliance on Chinese production of rare-earth minerals could take years. Analysts point out that “These minerals” is not entirely accurate because they’re not that uncommon in the planet's surface, but many reserves, such as those in Ukraine, where a deal was signed recently, are only in the initial phases of mining.

“The issue isn't scarcity per se, it’s that China can control how much is exported,” a specialist explained, noting that securing permits from China can be a complex and time-consuming endeavor.

The Arctic region, a key area of American interest, and South America, are additional nations with substantial rare-earth deposits. In the continental US, there are reserves in California, Wyoming, and Missouri, with the largest operational mine located at Mountain Pass, California, about 60 miles from Las Vegas.

Government Initiatives and Investment

Recently, the US Department of Defense became the major investor in a mining company, with intentions to open a new “mine-to-magnet” plant, named a new facility, to produce magnets essential for military aircraft, drones, and submarines.

Across the continent, estimated reserves of rare earths were calculated at millions of tons in the US and more than 14m tons in Canada—far less than the vast reserves believed to be in the Asian giant.

Following direct investment in the steel industry and US chipmakers, the federal agency announced it was prepared to make targeted funding in critical mineral companies.

“You’re competing against government-backed investment because China is picking these strategically that they aim to control,” a senior official said during a address this spring.

The official suggested that the US could use a sovereign wealth fund to accelerate production. “Why wouldn’t the wealthiest country in the world have the biggest state investment fund?” he asked.

Past Challenges and Future Outlook

US efforts to support domestic production have struggled in the past when Chinese producers lowered prices, rendering unsupported rare-earth development uneconomic against Asia's competitive pricing and far-sighted planning.

Five years ago, a market expert testified before a US Senate committee that “nations that fund in energy storage and supply chains now are poised to lead this sector for the foreseeable future. There is still time for the US but immediate steps are required.”

Five years on, a scramble to assemble 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. That came in the wake of a demand for payment in the form of natural resources from Ukraine. More recently, the authorities in Asia agreed to a deal with an US firm, securing rights to minerals such as key metals.

Can the US Succeed?

But, 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,” an analyst comments. The US, he adds, cannot be “self-reliant in the near future because it requires years to start operations and build refining capacity.”