China Dominates Neodymium Processing: US Eyes Rare Earth Reserve Amid Trade Tensions

U.S. and China trade tensions have intensified over neodymium, a critical rare earth used in permanent magnets for automobiles, wind turbines, and appliances. China processes about 90% of the world’s rare earths, maintaining a chokehold despite the elements being widespread. Neodymium-based magnets account for roughly 30% of magnet mass and are vital to U.S. manufacturing, including electric vehicles and motors. President Joe Biden announced plans to establish a strategic rare earth reserve and provide subsidies to domestic mining and processing to reduce reliance on China, but new capacity takes years to scale. Alternatives to neodymium magnets currently lack performance, efficiency, or torque to match, according to industry experts.