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Investing.com-- The Donald Trump administration will seek more equity stakes in strategic sectors to counter China’s export policies and wean local companies off Chinese goods, Treasury Secretary Scott Bessent said on Wednesday.
Speaking at a CNBC event, Bessent said that China’s recent restrictions on rare earth exports highlighted the need for U.S. self-reliance in critical minerals.
“When we get an announcement like this week with China on the rare earth, you realize we have to be self-sufficient, or we have to be sufficient with our allies,” Bessent said.
“When you are facing a non-market economy like China, then you have to exercise industrial policy,” Bessent said, adding that the U.S. would introduce rare earth price floors, and potentially build a strategic stockpile of critical minerals.
The Trump administration took direct stakes in several companies, including mineral miners Trilogy Metals Inc (NYSE:TMQ) and MP Materials Corp (NYSE:MP), and chipmaker Intel Corporation (NASDAQ:INTC), as it targeted sectors deemed strategically important.
Bessent told CNBC that the government would stick to strategic industries, and that the administration had identified seven industries it would work on developing domestically.
Bessent declined suggestions that the government would take stakes in major defense contractors, while criticizing the sector for falling behind in deliveries. Key sectors such as chips, metals, minerals, and pharmaceuticals appear to be the likely candidates for more government stakes.
The Treasury secretary’s comments come amid renewed trade tensions between the U.S. and China, as Trump lambasted Beijing’s recent introduction of tighter controls on rare earth exports.
Trump threatened to impose 100% tariffs on China and also threatened to cut trade ties with Beijing in several industries.