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Treasury Secretary Scott Bessent is signaling the administration’s intentions to set price floors, a form of price control, on rare earth metals. The move is intended to counter China’s dominance in the market, but it has Americans concerned it is setting a precedent for market controls that aren’t aligned with American values.
The justification for this anti-American action comes from China’s bad faith actions, Bessent suggests. He stated, “When you are facing a non-market economy like China, then you have to exercise industrial policy. 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.”
Treasury Secretary Scott Bessent said the United States plans to set price floors across sectors such as rare earths, suggesting a significant escalation in the administration’s market interventions aimed at countering China‘s influence over supply chains.
The Trump administration has sought to bolster its domestic critical mineral and rare earth supply chain to reduce its reliance on China through executive orders, congressional action, and, notably, deals to take direct stakes in private companies and to pay minimum prices for their products.
Bessent told CNBC in an interview Wednesday that China has manipulated markets for the past two decades by leveraging its dominance in sectors like rare earths and slashing prices to push out competitors.
“I wouldn’t be surprised,” if the U.S. takes stake in additional companies, as it has in the rare earth sector, Bessent said.