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Last week, a top US official came back from a southern state displaying a tiny sample of metal, announcing it was the initial rare-earth magnet produced in the US in 25 years.

He indicated that this was evidence the US is ending “China's dominance on our industrial pipeline.” Thanks to a new rare-earth mineral manufacturing plant in the state, he noted, “America is reclaiming its self-sufficiency.”

Challenging Beijing's Control in Critical Materials

Reducing Beijing's refining and production supremacy in these materials, which are vital for advanced electronics, energy storage, and military equipment, is a key goal for the current US administration. Using trade measures and other strategies, the US is counting on returning the industry back to American shores.

These tariffs prompted Beijing to limit rare-earth shipments to the US and pushed US leaders to forge agreements with an ally, Malaysia, Cambodia, and a key Asian economy.

While the US and China have since reached a temporary agreement on rare earths, China—with around 70% of global mining and nearly all of international refining—has a head start that may prove challenging to erode.

“Rare earths are essential for electric motors but also in guidance systems that have obvious applications for the defense department,” says a market analyst. “Any device that has a decent magnet in it uses rare earths.”

No Easy Fix for US Independence

There’s no easy fix for the US to reduce its dependence on Chinese production of materials essential to national security, chip manufacturing, and the shift from fossil fuels to renewable sources. According to official sources, the US imported 80% of the rare earths it consumed in recent years.

For some rare-earth minerals such as dysprosium, essential for semiconductors, and another mineral, essential to military applications, China's control over processing rises to 99%. Dysprosium and terbium are found in magnets crucial to EV motors and power systems in renewable energy, along with applications for mobile devices, advanced lighting, and nuclear reactors.

Long-Term Efforts and Global Deposits

Initiatives to cut the US’s dependence 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, including those in Eastern Europe, where an agreement was made recently, are only in the initial phases of extraction.

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

The Arctic region, a key area of US attention, and Brazil, are two other countries with significant rare-earth deposits. Domestically, there are reserves in California, the Midwest, and Missouri, with the largest operational mine located at Mountain Pass, California, not far from a major city.

Federal Efforts and Funding

Recently, the Pentagon became the largest shareholder in an industry operator, with plans to open a new “mine-to-magnet” plant, named 10X, to make magnets crucial for F-35 fighter jets, drones, and submarines.

In North America, measured and indicated resources of rare earths were calculated at 3.6m tons in the US and more than 14m tons in Canada—far less than the 44m tons believed to be in China.

Mirroring direct investment in other sectors and domestic technology firms, the interior department said it was ready to make direct investments in critical mineral companies.

“You’re competing against state capital because China is selecting these as priority areas that they want to invest in,” a senior official said during a address this spring.

The official floated that the US could use a national investment pool to speed production. “How could the wealthiest country in the world have the largest sovereign wealth fund?” he questioned.

Past Challenges and Future Outlook

American attempts to support domestic production have struggled in the past when China lowered prices, making unsubsidized rare-earth development uneconomic against China’s lower cost of production and long-term strategic outlook.

In the past, a market expert testified before a congressional panel that “those who invest in energy storage and industrial networks today are poised to dominate this sector for generations to come. It is not too late for the US but immediate steps are required.”

Since then, a scramble to build trading alliances around rare earths is speeding up.

“Soon, we’ll have so much critical mineral and rare earths that supply will exceed demand,” a top leader informed the media. This followed in the wake of a demand for compensation in the form of minerals from Ukraine. More recently, the authorities in Asia agreed to a deal with an American company, securing rights to minerals such as key metals.

Prospects for Success

However, is America able to close its gap and weaken Beijing's grip on rare-earth global networks? “America has implemented major measures already,” an analyst says. The US, he continues, cannot be “self-reliant in the near future because it requires years to bring a mine online and build refining capacity.”