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Last week, a top US official returned from South Carolina holding up a small piece of metal, proclaiming it was the initial rare-earth magnet produced in the US in 25 years.

The official stated that this was evidence the US is breaking “China's dominance on our supply chain.” Thanks to a recently opened rare-earth mineral processing center in South Carolina, he added, “We’re finally becoming independent again.”

Challenging Beijing's Control in Critical Materials

Ending Beijing's refining and production supremacy in these minerals, which are essential for advanced electronics, energy storage, and military equipment, is a key goal for the federal government. Via economic tools and other strategies, the US is betting on bringing the industry home to US soil.

Such measures prompted China to limit rare-earth shipments to the US and pushed US leaders to sign deals with Australia, Malaysia, Cambodia, and a key Asian economy.

While the US and China have since reached a trade truce on rare earths, China—with approximately the majority of worldwide extraction and nearly all of global processing capacity—holds an advantage that may prove challenging to erode.

“These materials are used in EV engines but also in defense technology that have clear uses for the defense department,” notes an industry expert. “Any device that has a decent magnet in it requires rare earths.”

No Easy Fix for American Self-Sufficiency

There’s no easy fix for the US to reduce its reliance on Chinese production of materials critical to national security, semiconductor production, and the shift from traditional energy to wind and solar. Data from federal reports, the US imported 80% of the rare earths it consumed in 2024.

In the case of rare-earth minerals such as dysprosium, used in chip production, and another mineral, essential to military applications, China's control over processing reaches almost total. Dysprosium and terbium are used in magnets essential for electric engines and generators in renewable energy, along with applications for mobile devices, high-intensity lighting, and nuclear reactors.

Long-Term Efforts and International Resources

Efforts to cut the US’s dependence on Chinese production of rare-earth minerals could take years. Analysts point out that “These minerals” is not entirely accurate because they’re relatively abundant in the earth’s crust, but many reserves, such as those in Eastern Europe, where an agreement was signed earlier this year, are only in the early stages of extraction.

“The issue isn't scarcity itself, it’s that Beijing can limit how much is sent abroad,” an analyst explained, noting that obtaining export licenses from China can be a complex and time-consuming endeavor.

Greenland, another focus of US attention, and Brazil, are two other countries with substantial rare-earth deposits. Domestically, there are reserves in the West, Wyoming, and the central US, with the biggest active site operating at Mountain Pass, California, not far from a major city.

Federal Efforts and Investment

Recently, the US Department of Defense took on the role of the largest shareholder in an industry operator, with plans to open a new “mine-to-magnet” plant, named a new facility, to produce magnets essential for F-35 fighter jets, unmanned systems, and submarines.

Across the continent, estimated reserves of rare earths were estimated to include millions of tons in the US and additional millions in Canada—significantly lower than the vast reserves estimated to be in the Asian giant.

Mirroring direct investment in other sectors and domestic technology firms, the federal agency announced it was prepared to make direct investments in strategic resource firms.

“You’re competing against government-backed investment because Beijing is picking these strategically that they want to invest in,” a cabinet member stated during a address this spring.

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

Historical Obstacles and Future Outlook

US efforts to promote domestic production have floundered in the past when China lowered prices, rendering unsupported rare-earth development uneconomic against Asia's competitive pricing and far-sighted planning.

Five years ago, an industry leader stated before a congressional panel that “nations that fund in energy storage and industrial networks now are likely to lead this industry for the foreseeable future. It is not too late for the US but action is needed now.”

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

“Soon, we’ll have an abundance of critical mineral and rare earths that supply will exceed demand,” a top leader told the media. That came eight months after a demand for compensation in the form of natural resources from another country. More recently, the authorities in Asia agreed to a deal with an American company, securing rights to minerals such as key metals.

Prospects for Success

But, is America able to close its gap and loosen Beijing's grip on rare-earth supply chains? “America has implemented major measures so far,” an analyst says. The US, he continues, cannot be “self-reliant in the short term because it takes time to bring a mine online and establish processing plants.”