Recently, the US Treasury Secretary came back from South Carolina brandishing a tiny sample of metal, declaring it was the first rare-earth magnet made in the US in 25 years.
He remarked that this was a sign the US is ending “Beijing's grip on our supply chain.” Thanks to a new rare-earth mineral refining facility in South Carolina, he noted, “America is reclaiming its self-sufficiency.”
Challenging China’s Dominance in Essential Minerals
Ending China’s processing and manufacturing dominance in these materials, which are essential for advanced electronics, energy storage, and military equipment, is a major focus for the American leadership. Through trade measures and other strategies, the US is betting on bringing the industry back to US soil.
These tariffs led China to limit rare-earth shipments to the US and pushed US leaders to forge agreements with an ally, Malaysia, another nation, and Japan.
While the US and China have since reached a trade truce on rare earths, China—with around 70% of worldwide extraction and over 90% of international refining—holds an advantage that may prove challenging to erode.
“These materials are essential for electric motors but also in defense technology that have clear uses for the defense department,” says an industry expert. “Anything that has a decent magnet in it uses rare earths.”
Challenging Path for US Independence
It won't be simple for the US to reset its reliance on imports from China of materials critical to national security, semiconductor production, and the transition from traditional energy to wind and solar. Data from federal reports, the US brought in the vast majority 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, Chinese refinement dominance reaches 99%. Dysprosium and terbium are found in magnets essential for electric engines and power systems in wind turbines, along with uses in cellphones, advanced lighting, and nuclear reactors.
Extended Timelines and Global Deposits
Efforts 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 relatively abundant in the planet's surface, but many deposits, such as those in Eastern Europe, where an agreement 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 lengthy, difficult process.
Greenland, another focus of American interest, and South America, are additional nations with significant rare-earth deposits. In the continental US, there are deposits in the West, Wyoming, and the central US, with the largest operational mine located at a key location, California, not far from Las Vegas.
Government Initiatives and Investment
In July, the US Department of Defense took on the role of the largest shareholder in a mining company, with plans to open a new “mine-to-magnet” plant, called 10X, to produce magnets crucial for F-35 fighter jets, drones, and naval vessels.
Across the continent, measured and indicated resources of rare earths were estimated to include 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.
Mirroring government funding in other sectors and domestic technology firms, the federal agency said it was prepared to make direct investments in strategic resource firms.
“You’re competing against government-backed investment because Beijing is selecting these strategically that they want to invest in,” a cabinet member stated during a speech this spring.
The official suggested that the US could use a national investment pool to accelerate production. “How could the wealthiest country in the world have the largest state investment fund?” he questioned.
Historical Obstacles and Prospects
US efforts to support domestic production have struggled in the past when Chinese producers lowered prices, making unsupported rare-earth development uneconomic against Asia's competitive pricing and long-term strategic outlook.
In the past, an industry leader stated before a congressional panel that “nations that fund in battery capacity and supply chains now are poised to lead this sector for the foreseeable future. It is not too late for the US but action is needed now.”
Five years on, a scramble to build trading alliances around rare earths is speeding up.
“In about a year from now, we’ll have so much essential resources that you won’t know what to do with them,” the President informed the media. That came eight months after a request for compensation in the form of minerals from another country. More recently, the government of Pakistan signed a deal with an US firm, securing rights to minerals such as antimony and copper.
Can the US Succeed?
But, is America able to close its shortfall and weaken Beijing's grip on rare-earth global networks? “The US has taken really significant steps so far,” an analyst comments. The nation, he adds, cannot be “self-reliant in the short term because it requires years to bring a mine online and build refining capacity.”
