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Recently, a top US official came back from South Carolina displaying a tiny sample of metal, proclaiming it was the first rare-earth magnet made in the US in decades.

He remarked that this was proof the US is ending “Beijing's grip on our supply chain.” Thanks to a recently opened rare-earth mineral manufacturing plant in South Carolina, he added, “The nation is regaining its autonomy.”

Challenging Beijing's Control in Essential Minerals

Overthrowing Beijing's refining and production supremacy in these minerals, which are essential for some semiconductors, batteries, and armaments, is a top priority for the federal government. Via trade measures and other approaches, the US is relying on returning the industry back to US soil.

These tariffs prompted China to restrict rare-earth shipments to the US and motivated the administration to sign deals with an ally, Malaysia, another nation, and a key Asian economy.

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

“Rare earths are used in electric motors but also in defense technology that have obvious applications for the defense department,” notes an industry expert. “Anything that has a strong magnet in it uses rare earths.”

Challenging Path for American Self-Sufficiency

It won't be simple for the US to reduce its reliance on Chinese production of minerals critical to defense, chip manufacturing, and the shift from fossil fuels to renewable sources. According to federal reports, the US imported 80% of the rare earths it used in recent years.

In the case of rare-earth minerals such as dysprosium, used in semiconductors, and another mineral, critical for military applications, Chinese refinement dominance reaches 99%. These elements are found in magnets essential for EV motors and generators in renewable energy, along with applications for cellphones, advanced lighting, and energy plants.

Long-Term Efforts and Global Deposits

Initiatives to reduce the US’s dependence on China's output of rare-earth minerals could take years. Analysts point out that “These minerals” is somewhat of a misnomer because they’re relatively abundant in the earth’s crust, but many deposits, including those in Eastern Europe, where an agreement was made earlier this year, are only in the early stages of extraction.

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

The Arctic region, another focus of American interest, and Brazil, are two other countries with significant rare-earth resources. Domestically, there are deposits in California, the Midwest, and Missouri, with the largest operational mine operating at a key location, the state, about 60 miles from Las Vegas.

Government Initiatives and Funding

Recently, the US Department of Defense took on the role of the major investor in an industry operator, with plans to open a new “integrated” plant, named a new facility, to produce magnets essential for F-35 fighter jets, unmanned systems, and naval vessels.

Across the continent, measured and indicated resources of rare earths were estimated to include millions of tons in the US and more than 14m tons in Canada—significantly lower than the vast reserves believed to be in China.

Following direct investment in the steel industry and domestic technology firms, the interior department said it was ready to make targeted funding in strategic resource firms.

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

The official floated that the US could use a sovereign wealth fund to speed production. “Why wouldn’t the richest nation in the world not possess the largest sovereign wealth fund?” he asked.

Past Challenges and Prospects

American attempts to support homegrown output have struggled in the past when Chinese producers lowered prices, making unsupported rare-earth development uneconomic against China’s lower cost of production and far-sighted planning.

Five years ago, a market expert testified before a US Senate committee that “those who invest in battery capacity and supply chains today are likely to lead this sector for the foreseeable future. It is not too late for the US but immediate steps are required.”

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

“In about a year from now, we’ll have so much critical mineral and rare earths that supply will exceed demand,” a top leader told the media. That came in the wake of a demand for compensation in the form of natural resources from Ukraine. More recently, the government of Pakistan signed a deal with an US firm, securing rights to minerals such as key metals.

Can the US Succeed?

However, 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 comments. The nation, he adds, is unlikely to become “self-reliant in the near future because it takes time to start operations and build refining capacity.”