Rare Earth Magnets Emerge as US-China Focus

China's dominance in the rare earth market is staggering, controlling roughly 60% of global mining and a commanding 90% of the refining process. This grip extends to the production of powerful rare earth magnets, with China manufacturing over 90% of the world's supply. The United States, in contrast, has a near-total reliance on imports for these critical components, with about 71% of its rare earth imports coming from China between 2021 and 2025. These are not just any materials; rare earth magnets are irreplaceable in a vast array of U.S. military hardware. An F-35 fighter jet requires over 900 pounds of rare earth materials for its advanced systems, while a single Virginia-class submarine uses approximately 9,200 pounds. These magnets are crucial for guidance systems in Tomahawk missiles, radar and sonar systems on destroyers, and in the motors of unmanned aerial vehicles. In 2025, Beijing escalated the trade conflict by imposing export controls on several rare earth elements and, crucially, the technology to produce high-performance magnets. The restrictions, introduced in April and expanded in October, created immediate and severe impacts, with Chinese rare earth magnet exports plummeting by 75% in the following two months. These actions were a direct response to U.S. tariffs and highlighted the vulnerability of Western supply chains. The U.S. is now in a race to rebuild its domestic rare earth supply chain, a capability it largely abandoned in the 1990s due to environmental concerns and lower costs from China. The Department of Defense has made significant investments, including a $400 million equity stake in MP Materials, the country's sole integrated rare earth mining and processing facility. This deal includes a 10-year price floor for essential magnet materials to ensure commercial viability. Companies like MP Materials and USA Rare Earth are at the forefront of the American effort to create a "mine-to-magnet" supply chain. MP Materials is developing a magnet factory in Fort Worth, Texas, with offtake agreements from major players like General Motors. Similarly, USA Rare Earth is developing the Round Top project in Texas, one of the largest heavy rare earth deposits in the U.S., and plans to have a magnet manufacturing facility in Oklahoma. Despite these efforts, achieving independence from China for rare earth magnets is a long-term challenge. While the U.S. is ramping up mining, it critically lacks refining and processing capacity, with nearly all of its mined rare earths still sent to Asia for processing. Experts estimate that building a fully independent and resilient domestic supply chain could take more than a decade.