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Recently, the US Treasury Secretary came back from a southern state brandishing a tiny sample of metal, proclaiming it was the initial rare-earth magnet made in the US in decades.

He remarked that this was evidence the US is ending “China’s chokehold on our supply chain.” Because of a new rare-earth mineral refining facility in the state, he noted, “We’re finally becoming independent again.”

Countering China’s Dominance in Critical Materials

Ending China’s refining and production supremacy in these minerals, which are vital for some semiconductors, energy storage, and military equipment, is a key goal for the American leadership. Using economic tools and other approaches, the US is betting on bringing the industry home to domestic facilities.

These tariffs led China to restrict rare-earth exports to the US and pushed the administration to sign deals with Australia, Malaysia, Cambodia, and a key Asian economy.

While the US and China have now brokered a trade truce on rare earths, Beijing—with approximately 70% of global mining and nearly all of international refining—has a head start that will be difficult to overcome.

“These materials are essential for EV engines but also in defense technology that have clear uses for the defense department,” notes a market analyst. “Any device that has a decent magnet in it requires rare earths.”

No Easy Fix for American Self-Sufficiency

There’s no easy fix for the US to reset its reliance on Chinese production of minerals essential to national security, chip manufacturing, and the transition from fossil fuels to renewable sources. Data from official sources, the US brought in 80% of the rare earths it used in 2024.

For some rare-earth minerals such as a key element, used in chip production, and another mineral, critical for military applications, China's control over processing reaches 99%. These elements are used in magnets essential for EV motors and power systems in renewable energy, along with applications for mobile devices, high-intensity lighting, and energy plants.

Long-Term Efforts and Global Deposits

Efforts to cut the US’s reliance on China's output of rare-earth minerals could take years. Experts note that “These minerals” is somewhat of a misnomer because they’re not that uncommon in the planet's surface, but many deposits, such as those in Eastern Europe, where an agreement was signed earlier this year, are only in the initial phases of mining.

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

Greenland, 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, the Midwest, and Missouri, with the largest operational mine located at a key location, California, about 60 miles from a major city.

Federal Efforts and Funding

In July, the Pentagon took on the role of the major investor in a mining company, with plans to open a new “integrated” plant, called 10X, to produce magnets essential for military aircraft, drones, and naval vessels.

In North America, measured and indicated resources of rare earths were calculated at 3.6m 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 other sectors and domestic technology firms, the interior department announced it was ready to make targeted funding in strategic resource firms.

“You’re competing against state capital because China is picking these strategically that they aim to control,” a cabinet member stated during a speech in April.

The official floated that the US could utilize a sovereign wealth fund to speed production. “How could the wealthiest country in the world not possess the largest state investment fund?” he asked.

Historical Obstacles and Prospects

US efforts to promote 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.

Five years ago, a market expert stated before a US Senate committee that “nations that fund in battery capacity and supply chains today are likely to dominate this industry for generations to come. It is not too late for the US but immediate steps are required.”

Five years on, a race to build trading alliances around rare earths is accelerating.

“In about a year from now, we’ll have so much essential resources that you won’t know what to do with them,” the President informed reporters. That came eight months after a request for compensation in the form of minerals from Ukraine. More recently, the government of Pakistan agreed to a contract with an American company, securing rights to minerals such as antimony and copper.

Prospects for Success

But, can the US make up its gap and loosen China’s hold on rare-earth supply chains? “The US has taken major measures already,” a specialist says. The nation, he adds, is unlikely to become “self-reliant in the short term because it requires years to start operations and establish processing plants.”