STILLWATER, Okla. — The parking lot outside the low-slung industrial building is mostly empty and the machinery inside is quiet. But sometime next year, if all goes well, this factory will help break China’s chokehold on a critical global market.

USA Rare Earth is part of a belated U.S. bid to reestablish a domestic supply chain for the high-performance magnets used in products such as drones, electric vehicles, smartphones, medical devices and military weapons.

The company is racing to establish a production line, hire several dozen skilled specialists and fine-tune its scientific formulas as it prepares to make millions of powerful neodymium, or neo, magnets in early 2026.

The geopolitical stakes are sobering. China dominates the market for a category of minerals known as “rare earths,” which are needed to make the magnets, as well as for the magnets themselves. Beijing exercised that dominance in recent weeks when it starved American automakers of needed supplies, seeking leverage over trade talks with President Donald Trump.

Long after surrendering the market to China, American companies are clawing their way back to relevance. But USA Rare Earth’s embryonic state — it went public in March — and the obstacles that line the company’s path reflect an uncomfortable truth: It will be years before the United States can shake its dependence on its main strategic adversary. And the federal government must be heavily involved to make that change happen.

“We have future sources. But for the next few years, the world’s in a tough spot,” said Joshua Ballard, USARE’s chief executive. “We kind of depend on China unfortunately. It’s how we left ourselves over the last few decades, and it’s going to take a while to get out of it.”

Inside the company’s 310,000-square-foot facility here in Oklahoma, which once housed printing presses for Rolling Stone magazine, the outlines of a manufacturing operation are taking shape. Technicians surround towering pieces of equipment, acquired from a Hitachi plant that mothballed the hardware a decade ago after only 18 months of use. Automatic tools bark and whir as the workers labor.

USARE is pursuing a cautious, phased approach to growth. The company intends to begin producing magnets at an annual rate of 600 metric tons early next year, before doubling that amount by the year’s end. A few years from now, this factory is expected to make 5,000 metric tons — or hundreds of millions — of magnets and bring in $800 million in annual revenue, Ballard told investors last month.

USARE has signed MOUs with several companies in the aerospace and toolmaking industries, which want to see if it can produce magnets that meet their specific requirements. The latest agreement came last week, when Moog Electric Motion Solutions asked the company to develop prototype magnets for use in Moog’s data-center coolant pumps.

Once the plant is up and running, it will receive half-ton barrels full of rare earth metals from a South Korean supplier. The old Hitachi machines will use hydrogen gas to weaken the metal flakes, before grinding them into a coarse powder and then pulverizing it with high-pressure jets of nitrogen to create an even finer talc.

The silky concoction will be pressed into compact blocks, baked in a high-temperature furnace and cut into precise shapes using diamond-coated wires.

Such advanced manufacturing is not new, but it is demanding. If the grains of powder are slightly too big or too small, or if the material is exposed to oxygen even briefly, the batch can be ruined.

“I call it a very simple, complicated process,” said Alex Jech, the plant manager. “The stretch part of this goal is just time of execution. We’ve got a lot of Legos to put together, and they’ve got to go together right.”

Jech, 40, a mechanical engineer with experience in high-volume plastic and paper manufacturing, joined the company in January. He’s living out of a recreational vehicle while trying to sell his family home in Joplin, Missouri.

When a corporate recruiter approached him about the job here, he declined the offer, saying magnet production in Oklahoma “sounded crazy.” But his wife convinced him to consider it, and he’s glad she did.

“Thinking about paper and plastics, they’re very established, they’re stable, they’re great industries, but they’re not exciting. This is an opportunity to really do something for our country that’s so unique,” he said.

Robert Fredette, the director of magnet operations, was nearly ready to retire when the company beckoned. At 62, he had been in the industry long enough to remember when a pair of Japanese and American scientists independently invented the first neo magnet in the early 1980s.

At the time, the U.S. led in global magnet production. But as China emerged as a low-cost producer with ample state support, the industry — and many others — migrated offshore, a trend that Trump is determined to reverse.

“All the people that I knew that were good left, and some of them went to China to run magnet factories,” said Fredette, known around the factory as “Magnet Bob.”

The U.S. has been trying for several years to encourage development of alternatives to Chinese sources of rare earth minerals. These naturally occurring substances contain one of 17 rare earth elements, such as neodymium.

Among U.S. companies, the most advanced is MP Materials, which operates the only working U.S. rare earth mine and bills itself as the “national champion” for hopes of a fully integrated domestic supply chain. MP Materials’ mine in Mountain Pass, Calif., about an hour southwest of Las Vegas, received $45 million from the Biden administration in 2022. The company expects to begin production of magnets later this year for General Motors at a facility in Fort Worth.

MP Materials is expected to capture the bulk of magnet demand from large manufacturers like GM, said Ryan Castilloux, founder and managing director of Adamas Intelligence in Toronto. But USARE and other smaller players are needed to meet demand for specialized magnets if the U.S. is really to establish a stand-alone supply chain.

In civilian and defense markets, industrial magnets must be produced in a near-infinite number of shapes and sizes and meet varying requirements to operate amid high or low temperatures and other harsh conditions.

“It’s just not realistic that any one or two producers can cover that whole spectrum of demand in the near term,” he said. “That is where this ecosystem of suppliers will be so important.”

USARE’s deliberate approach is designed to control risk. But the obstacles that the company faces are notable: finding enough talented workers to staff a supply chain that left the U.S. years ago, obtaining government support, and competing against China’s low-cost producers.

A big question is the company’s ability to commercialize the mineral deposits it owns in Round Top Mountain, near the Mexican border southeast of El Paso. The company has established that the site contains large amounts of several rare earths, including the “heavy” minerals that are especially valuable.

In the long run, the plan is to replace the raw materials purchased from South Korea with the company’s own rare earths. This “mine-to-magnet” supply chain is the holy grail of industry thinking.

But many of the Round Top rare earths are distributed in low concentrations. The company has yet to begin production mining and some industry analysts doubt whether the minerals can be profitably extracted.

China’s iron grip on the rare earth market makes cost issues a central consideration, one that many analysts say will require the federal government to intensify its involvement. Public subsidies may be needed to match the support Beijing provides its producers.

“I’ve been in D.C. quite a bit and I’ve talked to a lot of the folks, both on the executive side, as well as in the agencies themselves,” said USARE’s Ballard. “And what I can tell you is they are absolutely on fire trying to figure this out. They’re doing everything they can to work the levers that they have, or to think of new levers to support building out this industry.”

Washington’s urgency stems from the role that Chinese control of rare earth supplies is playing in the ongoing U.S.-China trade war. In April, two days after Trump announced sweeping tariffs on imported goods, including a 34% levy on those from China, the Chinese government announced new restrictions on its rare earth exports.

The abrupt cutoff prompted alarm among U.S. manufacturers that depend upon Chinese suppliers. Ford, which uses Chinese rare earth magnets in windshield wiper motors, shut its Chicago Assembly Plant for seven days, interrupting production of the Ford Explorer.

Mounting industry concern helped convince Trump administration officials to revive talks with Chinese diplomats over a trade war truce. After two days of meetings in London, both governments agreed to unwind recent trade war measures — including China’s rare earth embargo — and resume efforts to reach a comprehensive solution.

Those broader talks will proceed under the shadow of China’s rare earth leverage. Following the London settlement, Chinese officials began granting new export licenses for rare earth products. But they were limited to just six months, meaning a fresh cutoff looms later this year.

That explains why Ballard, and other industry executives, are in near constant contact with Trump administration officials about measures designed to speed domestic sourcing.

In April, Trump ordered the Commerce Department to investigate the national security implications arising from imported critical minerals and products made from them, including magnets. That probe could lead to new tariffs on top of those ordered by President Joe Biden and scheduled to take effect next year.

Trump also has taken steps to speed permitting for new mining operations of the sort that USA Rare Earth plans for its minerals deposit in Texas. And administration officials are mulling other steps, including financing, tax credits, purchase commitments and minerals stockpiling, according to industry analysts.

“Given the president’s urgent focus on critical mineral mining, this Administration will continue to use all the tools at our disposal to promote supply-chain resilience,” said a senior administration official, who spoke on the condition of anonymity to describe Trump’s aims.