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Swalwell and Reschenthaler Introduce Bill to Incentivize American-Made Magnets

February 24, 2025

WASHINGTON, DC – Last week, U.S. Representatives Eric Swalwell (CA-14) and Guy Reschenthaler (PA-14) introduced the Rare Earth Magnet Security Act (REMSA). This bipartisan bill secures the domestic supply chain and stimulates the production of rare earth magnets as part of a national initiative to strengthen the economy and combat climate change. It’s time to mine, make, and magnetize  minerals in the United States for the sake of our economic security.

REMSA would create a production tax credit for rare earth magnets that are manufactured in the United States. While the U.S. has made progress in developing this industry, only a few manufacturers currently produce these critical components domestically. These magnets are used in a wide variety of applications necessary for our modern economy, such as computer hard disks, cell phones, and MRIs. They are also critical for certain clean energy uses. For example, almost 90 percent of all-electric vehicles contain a powertrain driven by one of these magnets.

Rare earth magnets are challenging to make and are not readily available in large quantities. Low-cost, high-quality magnets from China have squeezed the profitability of United States producers, and while industry sources estimate the global rare earth magnet market will nearly double by 2027, China could dominate the market because of low production costs.

“Our nation’s economic security, national defense, and clean energy future depend on a stable supply of critical minerals and components. That’s why I’m proud to introduce the Rare Earth Magnet Security Act,” Congressman Eric Swalwell said. “China’s decision in 2024 to cut off the U.S. and other nations from key critical minerals was a wake-up call to our country’s dangerous dependence on foreign sources. We cannot allow foreign adversaries to control the materials that power our economy and strengthen our national security. This bill will boost domestic production of rare earth magnets, which are essential to everything from electric vehicles to advanced medical technology. I believe in putting American innovation and workers first. By investing in domestic manufacturing, we’re ensuring that the U.S. remains a global leader in technology, defense, and sustainability.”

The bill is endorsed by MP Materials, eVAC Magnetics, and Niron Magnetics. 

"While the U.S. has resumed responsible rare earth extraction and processing at scale, our country’s capacity to produce the magnets essential for manufacturing and national defense remains limited. REMSA is a bipartisan, fiscally responsible solution to catalyze private-sector investment, level the playing field for domestic producers, and close this critical gap," said Matt Sloustcher, EVP of Corporate Affairs & Chief Communications Officer, MP Materials.  

“Rare earth permanent magnets are essential to defense, aerospace, automotive, energy, and industrial applications. The Rare Earth Magnet Security Act of 2025 will promote domestic production of these critical rare earth permanent magnet solutions,” said Scott Pelhank, Vice President, of eVAC Magnetics. “This legislation is vital to ensuring U.S. national security, sustainable supply chains, and a resilient industrial base.”

The bipartisan bill creates a $20 per kilogram production tax credit for magnets that are manufactured in the United States, or $30 per kilogram for magnets that are both manufactured in the United States and for which all component rare earth material is produced and recycled or reclaimed wholly within the United States. To be eligible, the rare earth magnets may not include any component rare earth magnet material produced in non-allied foreign nations such as China, Iran, North Korea, and Russia.

Swalwell and Reschenthaler launched the bipartisan Congressional Critical Materials Caucus in 2021 to help the United States develop the technical expertise and production capabilities to assure a long-term, secure and sustainable supply of energy-critical elements like those used in rare earth magnets.

 

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