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Not long ago, a top US official returned from South Carolina holding up a small piece of metal, declaring it was the initial rare-earth magnet manufactured in the US in decades.

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

Breaking China’s Dominance in Essential Minerals

Overthrowing China’s refining and production supremacy in these materials, which are essential for advanced electronics, energy storage, and armaments, is a top priority for the federal government. Using trade measures and other approaches, the US is counting on returning the industry back to domestic facilities.

Such tariffs prompted China to limit rare-earth shipments to the US and motivated US leaders to forge agreements with an ally, a partner, Cambodia, and Japan.

While the US and China have now reached a trade truce on rare earths, Beijing—with around 70% of global mining and over 90% of international refining—has a head start that may prove challenging to erode.

“These materials are essential for electric motors but also in defense technology that have obvious applications for the military,” says an industry expert. “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, semiconductor production, and the transition from fossil fuels to renewable sources. According to federal reports, the US brought in the vast majority of the rare earths it used in 2024.

For some rare-earth minerals such as dysprosium, essential for semiconductors, and another mineral, essential to military applications, Chinese refinement dominance reaches almost total. These elements are found in magnets crucial to EV motors and generators in renewable energy, along with applications for mobile devices, high-intensity lighting, and nuclear reactors.

Long-Term Efforts and Global Deposits

Initiatives to cut the US’s reliance on Chinese production of rare-earth minerals may require a long time. 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 Ukraine, where a deal was signed recently, are only in the early stages of mining.

“The issue isn't scarcity per se, it’s that China can control how much is exported,” an analyst said, noting that securing permits from China can be a lengthy, difficult process.

The Arctic region, another focus of US attention, and Brazil, are two other countries with substantial rare-earth deposits. Domestically, there are deposits in the West, the Midwest, and the central US, with the largest operational mine operating at a key location, California, not far from Las Vegas.

Government Initiatives and Investment

In July, the Pentagon took on the role of the largest shareholder in a mining company, with plans to open a new “mine-to-magnet” plant, named 10X, to make magnets crucial for F-35 fighter jets, drones, and naval vessels.

In North America, estimated reserves of rare earths were calculated at millions of tons in the US and more than 14m tons in the northern neighbor—far less than the vast reserves believed to be in the Asian giant.

Following direct investment in other sectors and domestic technology firms, the federal agency said it was prepared to make targeted funding in critical mineral companies.

“The US is up against government-backed investment because Beijing is selecting these strategically that they aim to control,” a senior official said during a address this spring.

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

Historical Obstacles and Future Outlook

American attempts to promote domestic production have struggled in the past when China lowered prices, rendering unsupported rare-earth development uneconomic against China’s lower cost of production and far-sighted planning.

In the past, an industry leader stated before a US Senate committee that “those who invest in battery capacity and industrial networks now are likely to dominate this industry for generations to come. There is still time for the US but action is needed now.”

Five years on, a race to build international partnerships around rare earths is speeding up.

“In about a year from now, we’ll have so much critical mineral and rare earths that supply will exceed demand,” a top leader informed the media. That came in the wake of a demand for compensation in the form of natural resources from Ukraine. In September, the authorities in Asia agreed to a contract with an American company, giving it access to minerals such as antimony and copper.

Prospects for Success

But, can the US make up its shortfall and weaken China’s hold on rare-earth global networks? “America has implemented major measures so far,” a specialist comments. The nation, he adds, is unlikely to become “independent in the short term because it requires years to start operations and build refining capacity.”