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Last week, the US Treasury Secretary came back from South Carolina brandishing a small piece of metal, announcing it was the initial rare-earth magnet manufactured in the US in decades.

He indicated that this was a sign the US is ending “Beijing's grip on our industrial pipeline.” Because of a new rare-earth mineral processing center in South Carolina, he added, “We’re finally becoming independent again.”

Challenging Beijing's Control in Critical Materials

Reducing Beijing's processing and manufacturing dominance in these materials, which are vital for some semiconductors, energy storage, and armaments, is a major focus for the federal government. Through economic tools and other approaches, the US is relying on bringing the industry home to US soil.

These tariffs prompted Beijing to restrict rare-earth shipments to the US and motivated the administration to forge agreements with an ally, Malaysia, Cambodia, and Japan.

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

“Rare earths are used in electric motors 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 uses rare earths.”

Challenging Path for American Self-Sufficiency

There’s no easy fix for the US to reset its dependence on Chinese production of minerals critical to defense, semiconductor production, and the shift from fossil fuels to renewable sources. Data from official sources, the US imported 80% of the rare earths it used in recent years.

For some rare-earth minerals such as a key element, used in semiconductors, and another mineral, critical for military applications, Chinese refinement dominance reaches almost total. Dysprosium and terbium 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 cut the US’s dependence on Chinese production of rare-earth minerals may require a long time. Experts note that “These minerals” is somewhat of a misnomer because they’re not that uncommon in the planet's surface, but many reserves, such as those in Ukraine, where a deal was signed recently, are only in the initial phases of extraction.

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

The Arctic region, a key area of US attention, and Brazil, are additional nations with significant rare-earth resources. Domestically, there are reserves in the West, Wyoming, and Missouri, with the biggest active site located at Mountain Pass, California, not far from Las Vegas.

Federal Efforts and Investment

In July, the US Department of Defense took on the role of the largest shareholder in a mining company, with intentions to open a new “integrated” plant, called a new facility, to produce magnets essential 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 the Asian giant.

Mirroring government funding in the steel industry and domestic technology firms, the federal agency announced it was ready to make targeted funding in strategic resource firms.

“You’re competing against government-backed investment because China is picking these as priority areas that they want to invest in,” a senior official said during a speech in April.

He floated that the US could utilize a sovereign wealth fund to accelerate production. “Why wouldn’t the wealthiest country in the world not possess the biggest state investment fund?” he questioned.

Past Challenges and Future Outlook

American attempts to support homegrown output have struggled in the past when Chinese producers lowered prices, rendering unsupported rare-earth development uneconomic against China’s lower cost of production and long-term strategic outlook.

Five years ago, an industry leader testified before a US Senate committee that “nations that fund in battery capacity and supply chains now are likely to lead this industry for generations to come. There is still time for the US but immediate steps are required.”

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

“Soon, we’ll have so much critical mineral and rare earths that supply will exceed demand,” the President informed reporters. That came eight months after a demand for compensation in the form of minerals from another country. In September, the authorities in Asia agreed to a deal with an US firm, giving it access to minerals such as antimony and copper.

Can the US Succeed?

But, is America able to close its shortfall and loosen Beijing's grip on rare-earth global networks? “America has implemented major measures already,” an analyst comments. The US, he adds, is unlikely to become “independent in the short term because it requires years to bring a mine online and build refining capacity.”