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Recently, the US Treasury Secretary returned from South Carolina holding up a tiny sample of metal, proclaiming it was the first rare-earth magnet produced in the US in 25 years.

He remarked that this was evidence the US is overcoming “China’s chokehold on our industrial pipeline.” Thanks to a recently opened rare-earth mineral processing center in South Carolina, the official continued, “We’re finally becoming independent again.”

Challenging China’s Dominance in Essential Minerals

Ending Beijing's processing and manufacturing dominance in these materials, which are vital for advanced electronics, energy storage, and military equipment, is a major focus for the American leadership. Using tariffs and other strategies, the US is relying on bringing the industry home to domestic facilities.

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

While the US and China have since reached a temporary agreement on rare earths, China—with approximately 70% of worldwide extraction and nearly all of international refining—holds an advantage that will be difficult to erode.

“Rare earths are essential for EV engines but also in defense technology that have clear uses for the defense department,” notes a market analyst. “Anything that has a decent magnet in it requires rare earths.”

Challenging Path for US Independence

There’s no easy fix for the US to reduce its dependence on Chinese production 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 the vast majority of the rare earths it used in 2024.

For some rare-earth minerals such as dysprosium, used in chip production, and another mineral, critical for military applications, China's control over processing rises to 99%. Dysprosium and terbium are used in magnets crucial to electric engines and generators in wind turbines, along with uses in cellphones, advanced lighting, and nuclear reactors.

Extended Timelines and International Resources

Efforts to reduce the US’s reliance on Chinese production of rare-earth minerals could take years. Analysts point out that “Rare earths” is somewhat of a misnomer because they’re not that uncommon in the planet's surface, but many deposits, including those in Ukraine, where an agreement was signed recently, are only in the initial phases of mining.

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

The Arctic region, another focus of US attention, and Brazil, are additional nations with significant rare-earth resources. Domestically, there are deposits in the West, Wyoming, and the central US, with the largest operational mine located at Mountain Pass, California, not far from Las Vegas.

Federal Efforts and Funding

Recently, the US Department of Defense took on the role of the largest shareholder in an industry operator, with plans to open a new “integrated” plant, called a new facility, to produce magnets crucial for F-35 fighter jets, drones, and naval vessels.

In North America, measured and indicated resources of rare earths were calculated at 3.6m tons in the US and additional millions in Canada—far less than the 44m tons believed to be in the Asian giant.

Following government funding in the steel industry and domestic technology firms, the interior department announced it was prepared to make direct investments in critical mineral companies.

“You’re competing against state capital because Beijing is selecting these as priority areas that they want to invest in,” a cabinet member said during a address in April.

He floated that the US could utilize a sovereign wealth fund to accelerate production. “Why wouldn’t the wealthiest country in the world have the largest sovereign wealth fund?” he questioned.

Past Challenges and Prospects

American attempts to promote homegrown output have floundered in the past when Chinese producers cut costs, rendering unsubsidized rare-earth development unprofitable against China’s lower cost of production and far-sighted planning.

Five years ago, a market expert testified before a congressional panel that “nations that fund in battery capacity and supply chains today are poised to lead this industry for generations to come. It is not too late for the US but immediate steps are required.”

Five years on, a scramble to build international partnerships around rare earths is accelerating.

“Soon, we’ll have an abundance of essential resources that supply will exceed demand,” a top leader told the media. That came eight months after a request for compensation in the form of minerals from Ukraine. More recently, the government of Pakistan agreed to a contract with an American company, securing rights to minerals such as antimony and copper.

Can the US Succeed?

However, is America able to close its gap and weaken China’s hold on rare-earth supply chains? “America has implemented really significant steps already,” an analyst comments. The US, he continues, is unlikely to become “independent in the short term because it takes time to start operations and build refining capacity.”