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Not long ago, the US Treasury Secretary returned from a southern state holding up a small piece of metal, proclaiming it was the first rare-earth magnet made in the US in decades.

He indicated that this was evidence the US is overcoming “Beijing's grip on our industrial pipeline.” Because of a recently opened rare-earth mineral manufacturing plant in South Carolina, he added, “We’re finally becoming independent again.”

Breaking Beijing's Control in Essential Minerals

Reducing Beijing's refining and production supremacy in these minerals, which are essential for some semiconductors, batteries, and military equipment, is a top priority for the federal government. Through trade measures and other approaches, the US is betting on bringing the industry back to US soil.

Such tariffs led China to limit rare-earth shipments to the US and motivated the administration to sign deals with Australia, a partner, another nation, and Japan.

While the US and China have since reached a temporary agreement on rare earths, China—with around 70% of worldwide extraction and over 90% of global processing capacity—holds an advantage that may prove challenging to diminish.

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

No Easy Fix for American Self-Sufficiency

It won't be simple for the US to reset its reliance on Chinese production of materials essential to national security, semiconductor production, and the transition from traditional energy to wind and solar. According to federal reports, the US brought in 80% of the rare earths it consumed in recent years.

For some rare-earth minerals such as dysprosium, essential for chip production, and samarium, critical for military applications, China's control over processing reaches 99%. These elements are found in magnets essential for EV motors and power systems in renewable energy, along with applications for mobile devices, high-intensity lighting, and nuclear reactors.

Extended Timelines and International Resources

Initiatives to reduce the US’s reliance on Chinese production of rare-earth minerals could take years. Experts note that “These minerals” is not entirely accurate because they’re not that uncommon in the planet's surface, but many reserves, including those in Eastern Europe, where a deal was signed earlier this year, are only in the early stages of extraction.

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

The Arctic region, a key area of US attention, and South America, are additional nations with substantial rare-earth resources. In the continental US, there are deposits in California, Wyoming, and the central US, with the largest operational mine operating at a key location, the state, not far from Las Vegas.

Government Initiatives and Funding

In July, the US Department of Defense took on the role of the major investor in a mining company, with plans to open a new “integrated” plant, named a new facility, to make magnets crucial for F-35 fighter jets, unmanned systems, and naval vessels.

Across the continent, estimated reserves of rare earths were calculated at millions of tons in the US and additional millions in Canada—significantly lower than the vast reserves believed to be in China.

Following government funding in the steel industry and US chipmakers, the federal agency said it was ready to make direct investments in strategic resource firms.

“The US is up against state capital because Beijing is selecting these as priority areas that they aim to control,” a senior official stated during a address in April.

He floated that the US could use a sovereign wealth fund to accelerate production. “How could the richest nation in the world have the biggest state investment fund?” he asked.

Past Challenges and Future Outlook

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

In the past, an industry leader testified before a US Senate committee that “those who invest in battery capacity and industrial networks now are poised to dominate this sector for the foreseeable future. There is still time for the US but immediate steps are required.”

Since then, a scramble to build international partnerships around rare earths is accelerating.

“Soon, 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 request for compensation in the form of natural resources from another country. More recently, the government of Pakistan signed a deal with an US firm, securing rights to minerals such as key metals.

Prospects for Success

However, can the US make up its gap and loosen China’s hold on rare-earth supply chains? “The US has taken major measures so far,” an analyst says. The US, he adds, cannot be “self-reliant in the short term because it requires years to start operations and establish processing plants.”