US may take strategic stakes in rare earths companies to tackle China ‘power grab’ | China

The Trump administration has criticised China’s elevated restrictions on uncommon earth exports as a menace to international provide chains, and mentioned it could search to tighten management over strategic sectors by taking extra stakes in key firms to counter Beijing.Treasury secretary Scott Bessent informed an occasion on Wednesday that China’s dramatic new restrictions on uncommon earth minerals and magnets demonstrated the necessity for the US to be self-sufficient in crucial supplies or rely extra on trusted allies.He later characterised Beijing’s uncommon earth export curbs as “China versus the world,” vowing that Washington and its allies would “neither be commanded nor managed.”“This needs to be a transparent signal to our allies that we should work collectively, and work collectively we are going to,” Bessent informed a press convention. “We aren’t going to let a gaggle of bureaucrats in Beijing attempt to handle the worldwide provide chains.”He mentioned earlier that extra stakes had been attainable for sectors vital to US nationwide safety, together with in uncommon earths, semiconductors, prescribed drugs and metal. In uncommon earths, the administration would additionally set worth flooring and strategic stockpiles.Below Donald Trump, the US has shifted from subsidies to direct stakes in firms together with Intel Corp, minerals miner Trilogy Metals and uncommon earths miner MP Supplies.“We’re not going to return in and take stakes in non-strategic industries, however we’ve recognized seven industries” to develop domestically, Bessent mentioned. The federal government needed to be “very cautious to not overreach” and to make sure that investments had been assembly its strategic objectives, he added.Bessent spoke days after Beijing introduced contemporary controls on the export of uncommon earth applied sciences and objects, main Trump to threaten 100% tariff on items from China beginning on 1 November. China is the world’s main producer of the minerals used to make magnets essential to the auto, digital and defence industries.US commerce consultant Jamieson Greer warned at a Wednesday press briefing that US plans for a tariff hike or different export controls had been within the works.“China’s announcement [on export controls] is nothing greater than a world provide chain energy seize,” he mentioned. “This transfer just isn’t proportional retaliation. It’s an train in financial coercion on each nation on this planet.”Bessent mentioned US and Chinese language officers had been in contact to arrange a gathering between Trump and Xi Jinping, including that it was the extent of belief between the 2 leaders that had prevented an additional escalation of the commerce battle.The US doesn’t wish to decouple from China, however must take motion if Beijing proved to be an unreliable provider, Bessent mentioned, noting that Chinese language officers not too long ago informed US auto firms {that a} slowdown in shipments of uncommon earth magnets was “most likely one thing” to do with a vacation.“Not solely is China fuelling Russia’s battle [in Ukraine], however China’s actions have as soon as once more demonstrated the danger of being depending on them, on uncommon earths and for that matter, something,” Bessent mentioned, including, “If China desires to be an unreliable accomplice to the world, then the world must decouple.”With Reuters and Agence France-Presse