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Not long ago, the US Treasury Secretary returned from a southern state brandishing a small piece of metal, proclaiming it was the first rare-earth magnet manufactured in the US in 25 years.

The official stated that this was a sign the US is overcoming “Beijing's grip on our industrial pipeline.” Thanks to a new rare-earth mineral manufacturing plant in South Carolina, the official continued, “We’re finally becoming independent again.”

Breaking China’s Dominance in Essential Minerals

Ending Beijing's processing and manufacturing dominance in these materials, which are essential for advanced electronics, batteries, and armaments, is a key goal for the current US administration. Using economic tools and other approaches, the US is counting on bringing the industry back to US soil.

Such tariffs prompted China to restrict rare-earth exports to the US and pushed the administration to forge agreements with an ally, Malaysia, Cambodia, and a key Asian economy.

Although the US and China have now brokered a temporary agreement on rare earths, Beijing—with approximately the majority of global mining and nearly all of global processing capacity—holds an advantage that will be difficult to diminish.

“These materials are used in electric motors but also in defense technology that have clear uses for the defense department,” says a market analyst. “Any device that has a strong magnet in it uses rare earths.”

Challenging Path for US Independence

It won't be simple for the US to reset its reliance on Chinese production of materials essential to national security, semiconductor production, and the transition from fossil fuels to wind and solar. According to federal reports, the US brought in 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 semiconductors, and another mineral, essential to military applications, China's control over processing reaches 99%. These elements are used in magnets crucial to EV motors and generators in wind turbines, along with applications for mobile devices, advanced lighting, and energy plants.

Extended Timelines and International Resources

Initiatives to reduce the US’s reliance on China's output of rare-earth minerals could take years. Analysts point out that “Rare earths” is not entirely accurate because they’re relatively abundant in the planet's surface, but many reserves, such as those in Eastern Europe, where an agreement was made recently, are only in the initial phases of mining.

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

Greenland, another focus of American interest, and Brazil, are two other countries with significant rare-earth deposits. Domestically, there are deposits in the West, Wyoming, and the central US, with the biggest active site operating at a key location, the state, about 60 miles from a major city.

Government Initiatives and Investment

In July, the US Department of Defense took on the role of the largest shareholder in a mining company, with intentions to open a new “mine-to-magnet” plant, named 10X, to make magnets essential for military aircraft, unmanned systems, and submarines.

In North America, 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 vast reserves estimated to be in China.

Following direct investment in the steel industry and domestic technology firms, the federal agency announced it was prepared to make direct investments 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 address in April.

He suggested that the US could use a sovereign wealth fund to speed production. “How could the wealthiest country in the world not possess the biggest state investment fund?” he questioned.

Past Challenges and Future Outlook

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

In the past, 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 action is needed now.”

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

“In about a year from now, we’ll have so much critical mineral and rare earths that supply will exceed demand,” the President informed reporters. This followed in the wake of a demand for payment in the form of minerals from another country. In September, the authorities in Asia agreed to a deal with an American company, securing rights to minerals such as antimony and copper.

Can the US Succeed?

But, is America able to close its shortfall and weaken China’s hold on rare-earth global networks? “America has implemented really significant steps already,” an analyst says. The US, he adds, cannot be “independent in the near future because it takes time to bring a mine online and build refining capacity.”