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Last week, the US Treasury Secretary returned from South Carolina brandishing a tiny sample of metal, announcing it was the first rare-earth magnet manufactured in the US in decades.

He remarked that this was proof the US is ending “China's dominance on our supply chain.” Because of a new rare-earth mineral refining facility in the state, the official continued, “The nation is regaining its autonomy.”

Breaking Beijing's Control in Critical Materials

Ending Beijing's processing and manufacturing dominance in these minerals, which are crucial for advanced electronics, energy storage, and military equipment, is a major focus for the current US administration. Through economic tools and other approaches, the US is counting on returning the industry home to American shores.

Such tariffs led China to restrict rare-earth shipments to the US and motivated US leaders to forge agreements with an ally, a partner, another nation, and a key Asian economy.

Although the US and China have now reached a trade truce on rare earths, Beijing—with approximately the majority of global mining and nearly all of global processing capacity—has a head start that may prove challenging to overcome.

“Rare earths are used in EV engines but also in defense technology that have obvious applications for the military,” says an industry expert. “Any device that has a strong magnet in it requires rare earths.”

No Easy Fix for American Self-Sufficiency

It won't be simple for the US to reduce its dependence on imports from China of materials critical to defense, semiconductor production, and the shift from traditional energy to renewable sources. Data from official sources, the US brought in 80% of the rare earths it consumed in recent years.

In the case of rare-earth minerals such as dysprosium, essential for semiconductors, and samarium, essential to military applications, China's control over processing rises to 99%. Dysprosium and terbium are used in magnets essential for electric engines and power systems in wind turbines, along with uses in mobile devices, high-intensity lighting, and nuclear reactors.

Long-Term Efforts and International Resources

Efforts to cut the US’s dependence on China's output of rare-earth minerals may require a long time. Experts note that “These minerals” is not entirely accurate because they’re relatively abundant in the earth’s crust, but many reserves, such as those in Ukraine, where an agreement was made earlier this year, are only in the early stages of mining.

“The issue isn't scarcity itself, it’s that China can limit how much is exported,” an analyst said, adding that obtaining permits from China can be a complex and time-consuming endeavor.

Greenland, a key area of US attention, and South America, are additional nations with substantial rare-earth resources. Domestically, there are reserves in California, the Midwest, and Missouri, with the biggest active site operating at Mountain Pass, the state, not far from a major city.

Federal Efforts and Funding

In July, the US Department of Defense became the major investor in a mining company, with intentions to open a new “integrated” plant, named a new facility, to make magnets essential for military aircraft, drones, and naval vessels.

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

Following direct investment in the steel industry and US chipmakers, the interior department announced it was ready to make targeted funding in strategic resource firms.

“You’re competing against government-backed investment because Beijing is picking these strategically that they aim to control,” a senior official said during a speech this spring.

He suggested that the US could use a national investment pool to accelerate production. “How could the wealthiest country in the world have the biggest state investment fund?” he questioned.

Historical Obstacles and Prospects

US efforts to support domestic production have floundered in the past when China cut costs, making unsupported rare-earth development uneconomic against Asia's competitive pricing and long-term strategic outlook.

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

Since then, a race to assemble trading alliances 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 reporters. That came in the wake of a request for compensation 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

However, is America able to close its gap and loosen Beijing's grip on rare-earth supply chains? “The US has taken major measures already,” a specialist says. The nation, he adds, cannot be “independent in the near future because it takes time to bring a mine online and build refining capacity.”