The White House has made it a top priority to return the rare-earth industry to US shores, but experts question whether it is really feasible. US Treasury Secretary Scott Bessent recently returned from South Carolina brandishing a small piece of metal, proclaiming it was the first rare-earth magnet made in the US in a quarter of a century. He told Fox Business that it proved the US is ending 'China’s chokehold on our supply chain'.
Breaking China’s processing and manufacturing dominance in these materials, essential for semiconductors, batteries and armaments, is a top priority for the Trump administration. Tariffs and other economic tools have been deployed to return the industry to US shores, but China retaliated by restricting rare-earth exports to the US, prompting Trump to sign deals with Australia, Malaysia, Cambodia and Japan.
The US and China have now brokered a trade truce on rare earths, but China still has approximately 70% of global mining and over 90% of global processing capacity. The US imported 80% of the rare earths it used in 2024, according to the US Geological Survey. For some minerals such as dysprosium and samarium, Chinese refinement dominance rises to 99%.
Adam Webb, head of energy raw materials at Benchmark Mineral Intelligence, said: 'These materials are used in electric motors for EV cars but also in guidance systems that have obvious applications for the defense department.' He noted that rare earths are not that uncommon, but China can limit how much is exported, making the licensing process lengthy and difficult.
Trump’s efforts could take years. Significant deposits exist in Greenland, Brazil, Ukraine, and within the US in California, Wyoming and Missouri. The Pentagon recently became the largest shareholder in MP Materials, operator of the Mountain Pass mine in California, with plans for a new 'mine-to-magnet' plant for F-35 fighter jets and submarines. The US interior department said it is prepared to make direct investments in critical mineral companies.
Doug Burgum, US secretary of the interior, suggested the US could utilise a sovereign wealth fund to speed production. However, US efforts have floundered in the past when China lowered prices, rendering domestic production uneconomic against China’s lower costs and long-term strategic outlook.
