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Recently, the US Treasury Secretary came back from a southern state brandishing a tiny sample of metal, declaring it was the initial rare-earth magnet produced in the US in 25 years.

He indicated that this was proof the US is ending “China’s chokehold on our industrial pipeline.” Due to a recently opened rare-earth mineral refining facility in the state, the official continued, “America is reclaiming its self-sufficiency.”

Countering China’s Dominance in Essential Minerals

Reducing Beijing's refining and production supremacy in these minerals, which are crucial for some semiconductors, batteries, and armaments, is a key goal for the American leadership. Via trade measures and other approaches, the US is relying on returning the industry back to US soil.

These tariffs prompted Beijing to limit rare-earth exports to the US and motivated the administration to sign deals with Australia, a partner, 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 international refining—holds an advantage that will be difficult to erode.

“Rare earths are essential for EV engines but also in guidance systems that have clear uses for the defense department,” notes an industry expert. “Anything that has a strong magnet in it requires rare earths.”

Challenging Path for American Self-Sufficiency

It won't be simple for the US to reset its dependence on imports from China of minerals essential to national security, semiconductor production, and the transition from fossil fuels to renewable sources. Data from official sources, the US imported the vast majority of the rare earths it used in 2024.

For some rare-earth minerals such as a key element, used in chip production, and samarium, critical for defense systems, Chinese refinement dominance rises to almost total. Dysprosium and terbium are used in magnets essential for EV motors and power systems in renewable energy, along with uses in mobile devices, high-intensity lighting, and energy plants.

Long-Term Efforts and Global Deposits

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 earth’s crust, but many reserves, such as those in Eastern Europe, where a deal was made recently, are only in the early stages of mining.

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

The Arctic region, a key area of American interest, and South America, are two other countries with substantial rare-earth deposits. In the continental US, there are reserves in California, the Midwest, and the central US, with the largest operational mine located at Mountain Pass, California, about 60 miles from Las Vegas.

Federal Efforts and Investment

In July, the US Department of Defense became the largest shareholder in an industry operator, with plans to open a new “mine-to-magnet” plant, called a new facility, to make magnets essential for F-35 fighter jets, unmanned systems, and submarines.

In North America, estimated reserves of rare earths were estimated to include 3.6m tons in the US and more than 14m tons in the northern neighbor—significantly lower than the 44m tons estimated to be in the Asian giant.

Mirroring government funding in the steel industry and domestic technology firms, the federal agency announced it was ready to make direct investments in critical mineral companies.

“The US is up against government-backed investment because Beijing is picking these strategically that they want to invest in,” a cabinet member said during a address in April.

The official floated that the US could utilize a sovereign wealth fund to speed production. “How could the wealthiest country in the world have the largest sovereign wealth fund?” he asked.

Past Challenges and Prospects

American attempts to promote domestic production have struggled in the past when China lowered prices, making unsupported rare-earth development uneconomic against Asia's competitive pricing and far-sighted planning.

In the past, an industry leader stated before a US Senate committee that “nations that fund in energy storage and supply chains now are poised to dominate this industry for the foreseeable future. It is not too late for the US but immediate steps are required.”

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

“In about a year from now, we’ll have an abundance of critical mineral and rare earths that you won’t know what to do with them,” the President informed the media. This followed in the wake of a demand for payment in the form of natural resources from Ukraine. More recently, the government of Pakistan agreed to a contract with an American company, giving it access to minerals such as antimony and copper.

Prospects for Success

However, is America able to close its gap and loosen China’s hold on rare-earth global networks? “The US has taken major measures so far,” an analyst comments. The US, he continues, is unlikely to become “self-reliant in the near future because it requires years to bring a mine online and build refining capacity.”