Rare earth elements (REEs) have become increasingly vital for modern technology, powering everything from smartphones and electric vehicles to advanced military systems. However, the US has experienced a significant decline in its influence over the REE sector, particularly in extraction and chemical research, while China has assumed a dominant role. This shift has major economic, technological, and geopolitical implications.
China has long recognized the strategic value of REEs and has built an industry that controls not only the extraction and trade of these critical materials but also their chemical innovation. Since 2004, China has steadily increased its share of REE-related discoveries and research, now accounting for approximately 40% of global contributions to REE chemistry. This is four times the share of the next-largest contributor, India, and Russia. Meanwhile, many top REE-producing countries, particularly Japan, have experienced a dramatic decline in their contributions.
The U.S. was once a leader in REE production, with domestic mining and refining operations that contributed significantly to the global supply. However, over the past few decades, the US has lost its competitive edge. A key factor in this decline is the outsourcing of REE processing to China, driven by cost advantages and lax environmental regulations in Chinese mining operations.
From a research perspective, US contributions to the expansion of the chemical space (CS) have also declined. While the US has increased its international collaborations, particularly with China, its share of solo contributions has dropped from over 95% (1996-2006) to less than 80% today. In contrast, over 90% of China’s REE-related advancements come from domestic research teams operating independently. This suggests that China has built a self-sufficient ecosystem for REE innovation, while the US has grown increasingly reliant on international partnerships.
Several macroeconomic factors have contributed to the widening gap between the US and China in REE production and research:
The United States must urgently reclaim its strategic autonomy in the REE sector through a multifaceted approach that prioritizes domestic production, revitalizes research innovation, and fosters ethical international partnerships. China’s dominance in both extraction and advanced REE chemistry poses significant risks to US technological sovereignty, economic resilience, and national security. While globalization has driven efficiency through outsourcing, over-reliance on China, a geopolitical competitor, leaves critical supply chains vulnerable to disruption, as seen in past trade conflicts.
The national security imperative surrounding rare earth elements (REEs) cannot be overstated. These materials are critical not only for defense systems but also for the development of green technologies. Relying on a single adversarial nation for such vital resources is simply untenable. Therefore, the United States needs to treat REEs as a strategic asset, much like oil was viewed in the 20th century. To address this, policies must be designed to incentivize domestic mining, refining, and recycling of these materials, all while implementing strict environmental safeguards to prevent the ecological missteps of the past.
In addition to strengthening resource security, revitalizing US leadership in research is essential. The waning contributions of the US in REE innovation reflect a significant underinvestment in foundational science. To combat this trend, it is critical to bolster funding for materials science, encourage collaborations between academia and industry, and expand STEM education initiatives. Furthermore, while rebuilding research ties with allies such as Japan and Australia is important for pooling expertise, it should be approached with caution to avoid excessive dependence on potentially adversarial nations.
Economic and policy reforms are also necessary to overcome the debt burden that constrains investments in rare earths. Achieving these reforms will require bipartisan political will, as well as the introduction of tax incentives for domestic processing, grants for research and development of alternative materials, and strategic stockpiling to mitigate potential supply shocks. The “China Initiative” has underscored the risks of collaboration; however, it has also alienated valuable talent. Therefore, a balanced approach to intellectual property security, combined with a commitment to open science, is crucial.
Finally, ethical and sustainable practices must guide the US approach to REEs. Competing with China’s lax environmental standards should not lead to a replication of those practices. Instead, the US has the opportunity to lead in sustainable REE extraction and to promote circular-economy models, such as e-waste recycling. By turning ethical practices into a competitive advantage, the US can simultaneously align with climate goals and set a global standard for responsible resource management.
The decline of US influence in the REE sector raises concerns about supply chain security, technological independence, and national security. With China controlling the majority of global REE production and innovation, the US and its allies face potential supply disruptions and increased costs for critical materials. In response, the US has begun exploring new policies to revive domestic REE production, including reopening mines, investing in alternative sources, and funding research on advanced materials. However, reversing decades of decline will require sustained effort and international cooperation.
As global demand for REEs continues to grow, the US must decide whether to rebuild its own REE capabilities or remain dependent on foreign suppliers, particularly China. The outcome of this strategic challenge will shape the future of American influence in key technological and industrial sectors.
The US cannot afford complacency. A hybrid strategy rebuilding domestic capacity while collaborating with allied nations offers a path to reduce vulnerability. This demands long-term commitment, akin to the Apollo program, but with a focus on materials science and supply chain resilience. Failure to act risks ceding control over the building blocks of the 21st-century economy, undermining America’s technological edge and geopolitical influence. The time for decisive action is now.