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Last week, a top US official returned from a southern state holding up a tiny sample of metal, proclaiming it was the initial rare-earth magnet produced in the US in a quarter of a century.

The official stated that this was a sign the US is breaking “China’s chokehold on our industrial pipeline.” Thanks to a recently opened rare-earth mineral manufacturing plant in South Carolina, he added, “The nation is regaining its autonomy.”

Breaking Beijing's Control in Critical Materials

Overthrowing China’s processing and manufacturing dominance in these minerals, which are crucial for advanced electronics, batteries, and military equipment, is a key goal for the federal government. Using economic tools and other strategies, the US is betting on bringing the industry home to domestic facilities.

These tariffs led China to limit rare-earth shipments to the US and motivated the administration to sign deals with Australia, Malaysia, another nation, and a key Asian economy.

While the US and China have since brokered a trade truce on rare earths, China—with around 70% of global mining and nearly all of international refining—holds an advantage that may prove challenging to overcome.

“Rare earths are essential for EV engines but also in defense technology that have obvious applications for the defense department,” notes a market analyst. “Anything 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 reset its reliance on imports from China of minerals critical to national security, semiconductor production, and the transition from fossil fuels to wind and solar. Data from official sources, the US brought in the vast majority of the rare earths it used in recent years.

In the case of rare-earth minerals such as a key element, essential for chip production, and another mineral, essential to defense systems, China's control over processing reaches 99%. These elements are found in magnets crucial to electric engines and generators in renewable energy, along with applications for mobile devices, high-intensity lighting, and energy plants.

Extended Timelines and Global Deposits

Initiatives to reduce the US’s reliance on China's output of rare-earth minerals may require a long time. Experts note that “Rare earths” is not entirely accurate because they’re relatively abundant in the earth’s crust, but many reserves, including those in Ukraine, where a deal was signed recently, are only in the early stages of extraction.

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

Greenland, a key area of American interest, and South America, are additional nations with substantial rare-earth resources. Domestically, there are deposits in the West, Wyoming, and Missouri, with the biggest active site located at a key location, California, about 60 miles from Las Vegas.

Government Initiatives and Investment

In July, the Pentagon took on the role of the major investor in a mining company, with plans to open a new “integrated” plant, named a new facility, to make magnets essential for military aircraft, unmanned systems, and submarines.

In North America, measured and indicated resources of rare earths were estimated to include millions of tons in the US and more than 14m tons 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 said it was ready to make direct investments in strategic resource firms.

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

The official floated that the US could use a sovereign wealth fund to speed production. “How could the richest nation in the world have the biggest state investment fund?” he asked.

Historical Obstacles and Future Outlook

American attempts to support homegrown output have floundered in the past when China cut costs, making unsubsidized rare-earth development unprofitable against Asia's competitive pricing and long-term strategic outlook.

In the past, a market expert testified before a US Senate committee that “nations that fund in energy storage and industrial networks today are likely to lead this sector for generations to come. 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.

“In about a year from now, 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 eight months after a request for payment in the form of natural resources from another country. More recently, the authorities in Asia signed a deal with an American company, giving it access to minerals such as antimony and copper.

Prospects for Success

However, is America able to close its shortfall and weaken Beijing's grip on rare-earth global networks? “The US has taken really significant steps already,” an analyst says. The nation, he continues, is unlikely to become “self-reliant in the near future because it requires years to start operations and establish processing plants.”