A new bipartisan bill, the Magnets Value Chain Support Act of 2026, has been introduced by influential US lawmakers to address America’s reliance on China for critical magnet technology. Representative John Moolenaar and Representative Ro Khanna highlighted the need to reduce China’s control over 90% of the magnet supply chain. The proposed legislation aims to incentivize domestic magnet production and reduce dependence on foreign suppliers.
The bill includes tax credits to support various stages of magnet production within the US, from rare earth oxide processing to advanced manufacturing. It also encourages US motor manufacturers to purchase domestically produced permanent magnets. The legislation seeks to enhance supply chain resilience and ensure a portion of production capacity is allocated for defense-related orders.
Industry supporters emphasized the strategic importance of the bill, citing China’s dominance in rare earth magnet production. John Bozzella from the Alliance for Automotive Innovation warned of China’s efforts to control global magnet supply, crucial for industries like automotive manufacturing. The proposed incentives aim to boost domestic production and strengthen supply chain resiliency.
Permanent magnets play a vital role in various sectors, including electric vehicles, wind turbines, robotics, and defense systems. Lawmakers highlighted China’s export restrictions on rare earth elements and the consequent disruptions to US production. The bill aims to mitigate supply chain risks and promote domestic manufacturing in collaboration with approved partner countries.
