ISTANBUL
Treasury Secretary Scott Bessent said Wednesday that the US government will impose price floors in a variety of industries in order to counteract Chinese market manipulation.
“When you are facing a non-market economy like China, then you have to exercise industrial policy,” Bessent said at CNBC's Invest in America Forum in Washington, DC.
China has driven foreign competitors in the rare earths industry out of business over the past two decades by using its global dominance in refining and processing to slash prices, he said.
“So we’re going to set price floors and the forward buying to make sure that this doesn’t happen again, and we’re going to do it across a range of industries,” he noted.
Additionally, the US needs to establish a strategic mineral reserve, he said, adding that JP Morgan Chase would like to collaborate with the Trump administration to establish such a reserve.
Rare earth magnets are used by the US in several of its most critical weaponry systems, including smart bombs, Tomahawk missiles, and the F-35 aircraft. The US government has recently taken steps to reduce its reliance on China for rare earths while increasing domestic production.
In July, the largest US rare earth miner, MP Materials, and the Department of Defense reached an agreement that includes an offtake agreement, a price floor, and an ownership investment.
Bessent said that the US could strike similar deals with other companies in the wake of China's new rare earth restrictions.
“I wouldn’t be surprised,” he said when asked about more deals. “When we get an announcement like this week with China on the rare earths, you realize we have to be self-sufficient, or we have to be sufficient with our allies.”
He said that the Trump administration will refrain from investing in non-strategic sectors. “We do have to be very careful not to overreach,” he said.
China last Thursday expanded its restrictions on rare earth exports, and Trump, in response, threatened to impose 100% tariffs on China.