US lawmakers unveil bill to curb China magnet grip

Washington, June 10 (SocialNews.XYZ) A bipartisan pair of influential US lawmakers has introduced legislation aimed at rebuilding America's permanent magnet supply chain and reducing what they describe as a dangerous dependence on China for a technology critical to economic competitiveness and national security.

The legislation, known as the Magnets Value Chain Support Act of 2026, was introduced Tuesday by House Select Committee on China Chairman Rep. John Moolenaar, a Republican from Michigan, and Ranking Member Rep. Ro Khanna, a Democrat from California.

"Magnets are in the technology Americans rely on every day, and right now, China controls over 90 percent of the supply chain for these critical components," Moolenaar said.

"China spent decades deliberately cornering the magnet market, and last year it weaponized that leverage to restrict rare earth exports essential to our defense systems and broader economy,” he said.

This bill creates the market incentives needed to reshore a vital supply chain and helps ensure American manufacturers lead the growing future of magnet production," he added

Khanna said the United States had become overly reliant on foreign suppliers for a critical industry.

"For too long, the United States has watched an essential industry move overseas, leaving us woefully dependent on China. The Magnets Value Chain Support Act will level the playing field," he said.

"It will address a critical chokepoint by rebuilding the entire magnet supply chain here at home and creating incentives for American magnet production that power everything from electric vehicles to military systems."

The bill would establish a series of tax credits designed to support every stage of domestic magnet production, from rare earth oxide processing to advanced magnet manufacturing. It would also create incentives for US motor manufacturers to purchase domestically produced permanent magnets, they said.

The proposal includes production credits ranging from $5 per kilogram for rare earth oxide production to as much as $40 per kilogram for advanced defence-grade permanent magnets produced with high levels of US or partner-country inputs.

The legislation would require manufacturers receiving production credits to maintain a portion of their capacity for defence-related orders. It would also bar credits for materials linked at any stage of the supply chain to what the bill defines as prohibited foreign entities.

Credits would be limited primarily to US manufacturing activities and approved partner countries, including NATO allies, Japan, Australia, South Korea, Canada and Mexico.

Supporters from industry groups and manufacturers argued that the legislation addresses a growing strategic vulnerability.

John Bozzella, President and CEO of the Alliance for Automotive Innovation, said China was "trying to lock up the global supply of rare earth magnets that are essential to automotive manufacturing in America". He added that the legislation would increase domestic production through "targeted incentives that support investment, innovation and supply chain resiliency here at home".

The bill's backers noted that permanent magnets are essential components in electric vehicles, wind turbines, robotics, drones, guided munitions and advanced defence systems. They said China currently produces more than 90 per cent of the world's rare earth permanent magnets and has used a long-term industrial strategy to dominate the sector.

Lawmakers also pointed to China's 2025 restrictions on exports of dysprosium and terbium, two heavy rare earth elements used in high-performance defence-grade magnets, saying the move disrupted US production lines and highlighted supply chain risks.

Source: IANS