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Last week, a top US official came back from South Carolina displaying a tiny sample of metal, proclaiming it was the initial rare-earth magnet made in the US in 25 years.

He remarked that this was evidence the US is breaking “China's dominance on our supply chain.” Due to a recently opened rare-earth mineral processing center in the state, the official continued, “The nation is regaining its autonomy.”

Breaking China’s Dominance in Critical Materials

Ending Beijing's processing and manufacturing dominance in these materials, which are essential for advanced electronics, batteries, and military equipment, is a key goal for the American leadership. Through tariffs and other strategies, the US is betting on returning the industry back to domestic facilities.

These measures led Beijing to limit rare-earth shipments to the US and pushed US leaders to sign deals with Australia, a partner, another nation, and Japan.

Although the US and China have now brokered a trade truce on rare earths, China—with approximately the majority of global mining and nearly all of international refining—has a head start that will be difficult to overcome.

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

Challenging Path for US Independence

There’s no easy fix for the US to reset its reliance on Chinese production of materials critical to defense, chip manufacturing, and the shift from traditional energy to wind and solar. According to official sources, the US imported 80% of the rare earths it consumed in recent years.

For some rare-earth minerals such as a key element, used in chip production, and another mineral, critical for defense systems, Chinese refinement dominance reaches almost total. Dysprosium and terbium are used in magnets crucial to electric engines and generators in wind turbines, along with uses in cellphones, high-intensity lighting, and energy plants.

Long-Term Efforts and International Resources

Initiatives to cut the US’s reliance on Chinese production of rare-earth minerals may require a long time. Analysts point out that “These minerals” is not entirely accurate because they’re relatively abundant in the earth’s crust, but many deposits, such as those in Eastern Europe, where an agreement was signed recently, are only in the early stages of extraction.

“It’s not that there’s a shortage per se, it’s that Beijing can limit how much is exported,” an analyst said, adding that securing permits from China can be a complex and time-consuming endeavor.

Greenland, another focus of American interest, and Brazil, are additional nations with significant rare-earth deposits. In the continental US, there are deposits in the West, the Midwest, and the central US, with the largest operational mine located at a key location, California, not far from Las Vegas.

Federal Efforts and Funding

In July, the US Department of Defense took on the role of the major investor in an industry operator, with plans to open a new “mine-to-magnet” plant, called a new facility, to make magnets crucial for F-35 fighter jets, unmanned systems, and submarines.

Across the continent, measured and indicated resources of rare earths were estimated to include millions of tons in the US and additional millions in Canada—far less than the vast reserves believed to be in the Asian giant.

Following government funding in the steel industry and domestic technology firms, the federal agency said it was prepared to make targeted funding in critical mineral companies.

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

He floated that the US could utilize a national investment pool to accelerate production. “How could the richest nation in the world not possess the largest state investment fund?” he questioned.

Past Challenges and Prospects

US efforts to support domestic production have floundered in the past when Chinese producers lowered prices, making unsupported rare-earth development unprofitable against Asia's competitive pricing and far-sighted planning.

In the past, a market expert testified before a congressional panel that “nations that fund in energy storage and supply chains now are likely to dominate this sector for generations to come. It is not too late for the US but action is needed now.”

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 supply will exceed demand,” a top leader informed the media. That came eight months after a request for payment in the form of natural resources from another country. More recently, the government of Pakistan agreed to a contract with an American company, giving it access to minerals such as key metals.

Can the US Succeed?

But, can the US make up its gap and loosen Beijing's grip on rare-earth supply chains? “The US has taken really significant steps already,” a specialist says. The US, he continues, is unlikely to become “self-reliant in the near future because it requires years to bring a mine online and build refining capacity.”