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Last week, a top US official came back from a southern state holding up a small piece of metal, announcing it was the first rare-earth magnet produced in the US in decades.

He remarked that this was evidence the US is ending “China's dominance on our industrial pipeline.” Due to a recently opened rare-earth mineral manufacturing plant in South Carolina, he noted, “America is reclaiming its self-sufficiency.”

Breaking China’s Dominance in Essential Minerals

Reducing China’s refining and production supremacy in these materials, which are essential for some semiconductors, energy storage, and armaments, is a top priority for the federal government. Through tariffs and other strategies, the US is betting on bringing the industry home to American shores.

These tariffs led China to restrict rare-earth exports to the US and pushed US leaders to sign deals with an ally, Malaysia, Cambodia, and a key Asian economy.

Although the US and China have since brokered a temporary agreement on rare earths, China—with approximately 70% of worldwide extraction and nearly all of global processing capacity—holds an advantage that may prove challenging to erode.

“Rare earths are essential for electric motors but also in defense technology that have clear uses for the military,” says a market analyst. “Anything that has a strong magnet in it uses rare earths.”

Challenging Path for American Self-Sufficiency

It won't be simple for the US to reset its dependence on Chinese production of materials critical to national security, chip manufacturing, and the shift from fossil fuels to renewable sources. Data from official sources, the US brought in the vast majority of the rare earths it consumed in 2024.

For some rare-earth minerals such as a key element, essential for semiconductors, and another mineral, critical for defense systems, Chinese refinement dominance reaches almost total. These elements are used in magnets crucial to electric engines and generators in renewable energy, along with uses in cellphones, high-intensity lighting, and nuclear reactors.

Extended Timelines and Global Deposits

Efforts to cut the US’s dependence on China's output 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 earth’s crust, but many deposits, including those in Ukraine, where an agreement was signed earlier this year, are only in the initial phases of mining.

“It’s not that there’s a shortage itself, it’s that Beijing can control how much is sent abroad,” an analyst explained, noting that securing export licenses from China can be a lengthy, difficult process.

Greenland, another focus of US attention, and Brazil, are additional nations with significant rare-earth deposits. In the continental US, there are deposits in California, the Midwest, and Missouri, with the biggest active site operating at Mountain Pass, California, not far from a major city.

Government Initiatives and Funding

In July, the Pentagon became the major investor in an industry operator, with plans to open a new “mine-to-magnet” plant, named a new facility, to make magnets essential for military aircraft, unmanned systems, and naval vessels.

Across the continent, estimated reserves of rare earths were calculated at 3.6m tons in the US and more than 14m tons in the northern neighbor—significantly lower than the vast reserves estimated to be in the Asian giant.

Mirroring government funding in the steel industry and domestic technology firms, 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 picking these strategically that they aim to control,” a cabinet member stated during a speech in April.

The official suggested that the US could use a sovereign wealth fund to accelerate production. “How could the richest nation in the world not possess the largest state investment fund?” he asked.

Historical Obstacles and Prospects

US efforts to support homegrown output have struggled in the past when Chinese producers cut costs, making unsupported rare-earth development unprofitable against Asia's competitive pricing and far-sighted planning.

Five years ago, a market expert testified before a US Senate committee that “those who invest in energy storage and supply chains today are poised to dominate this industry for generations to come. There is still time for the US but action is needed now.”

Five years on, a scramble to assemble trading alliances around rare earths is speeding up.

“In about a year from now, we’ll have an abundance of critical mineral and rare earths that supply will exceed demand,” a top leader informed the media. This followed eight months after a demand for compensation in the form of natural resources from another country. In September, the government of Pakistan signed a deal with an American company, giving it access to minerals such as antimony and copper.

Can the US Succeed?

However, can the US make up its gap and weaken China’s hold on rare-earth supply chains? “America has implemented really significant steps so far,” a specialist comments. The US, he continues, is unlikely to become “self-reliant in the near future because it takes time to start operations and establish processing plants.”