The U.S. Magnet Materials Association warned that the United States is "totally dependent" on imports for rare earth materials.
Rare earth materials are used in wind turbines, hydroelectric batteries and precision-guided munitions.
China, the USMMA said, provides more than 97 percent of the word's rare earth raw materials and rebuilding domestic capacity could take more than a decade.
The USMMA said it backs the findings of a report to U.S. lawmakers that warn U.S. defense systems will continue to rely on foreign resources for rare earth materials.
The association further notes that defense contractors should limit their dependence while addressing the lack of effective substitutes.
"USMMA believes that urgent and collective action is needed by the federal government in order to head off the impending rare earth crisis," the association said.