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Not long ago, a top US official came back from South Carolina displaying a tiny sample of metal, declaring it was the first rare-earth magnet produced in the US in a quarter of a century.

He remarked that this was evidence the US is overcoming “China's dominance on our industrial pipeline.” Because of 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 Critical Materials

Reducing Beijing's refining and production supremacy in these materials, which are crucial for advanced electronics, batteries, and military equipment, is a major focus for the American leadership. Via tariffs and other strategies, the US is betting on bringing the industry home to US soil.

Such measures led Beijing to limit rare-earth exports to the US and pushed the administration to forge agreements with an ally, Malaysia, Cambodia, and Japan.

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

“These materials are essential for EV engines but also in defense technology that have obvious applications for the military,” says a market analyst. “Any device that has a decent magnet in it requires rare earths.”

Challenging Path for US Independence

It won't be simple for the US to reset its dependence on imports from China of minerals essential to defense, semiconductor production, and the transition from traditional energy to wind and solar. Data from federal reports, the US imported 80% of the rare earths it used in 2024.

For some rare-earth minerals such as a key element, essential for chip production, and another mineral, essential to defense systems, Chinese refinement dominance reaches almost total. Dysprosium and terbium are found in magnets crucial to EV motors and power systems in renewable energy, along with applications for cellphones, advanced lighting, and energy plants.

Long-Term Efforts and Global Deposits

Efforts to reduce the US’s dependence on Chinese production of rare-earth minerals could take years. Experts note 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 early stages of mining.

“It’s not that there’s a shortage itself, it’s that China can limit how much is exported,” an analyst said, noting that securing export licenses from China can be a complex and time-consuming endeavor.

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

Federal Efforts and Funding

In July, the Pentagon became the largest shareholder in an industry operator, with plans to open a new “integrated” plant, called 10X, to produce magnets essential for F-35 fighter jets, unmanned systems, and naval vessels.

Across the continent, measured and indicated resources of rare earths were calculated at millions of tons in the US and additional millions in the northern neighbor—significantly lower than the 44m tons estimated to be in China.

Mirroring direct investment in other sectors and US chipmakers, the interior department announced it was prepared to make direct investments in critical mineral companies.

“The US is up against state capital because China is picking these strategically that they aim to control,” a cabinet member stated during a speech this spring.

The official suggested that the US could utilize a national investment pool to speed production. “How could the wealthiest country in the world not possess the biggest state investment fund?” he questioned.

Past Challenges and Prospects

US efforts to support domestic production have struggled in the past when Chinese producers cut costs, rendering unsupported rare-earth development uneconomic against China’s lower cost of production and long-term strategic outlook.

In the past, a market expert testified before a congressional panel that “those who invest in energy storage and supply chains now are poised to lead this sector for the foreseeable future. It is not too late for the US but immediate steps are required.”

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 supply will exceed demand,” the President told the media. This followed eight months after a demand for payment in the form of natural resources from another country. More recently, the authorities in Asia signed a contract with an US firm, giving it access to minerals such as key metals.

Prospects for Success

But, is America able to close its gap and weaken Beijing's grip on rare-earth global networks? “America has implemented major measures already,” a specialist comments. The nation, he adds, cannot be “self-reliant in the near future because it requires years to start operations and build refining capacity.”