The Trump administration has criticised China’s increased restrictions on rare earth exports as a threat to global supply chains, and said it would seek to tighten control over strategic sectors by taking more stakes in key companies to counter Beijing.
Treasury secretary Scott Bessent told an event on Wednesday that China’s dramatic new restrictions on rare earth minerals and magnets demonstrated the need for the US to be self-sufficient in critical materials or rely more on trusted allies.
He later characterised Beijing’s rare earth export curbs as “China versus the world,” vowing that Washington and its allies would “neither be commanded nor controlled.”
“This should be a clear sign to our allies that we must work together, and work together we will,” Bessent told a press conference. “We are not going to let a group of bureaucrats in Beijing try to manage the global supply chains.”
He said earlier that more stakes were possible for sectors important to US national security, including in rare earths, semiconductors, pharmaceuticals and steel. In rare earths, the administration would also set price floors and strategic stockpiles.
Under Donald Trump, the US has shifted from subsidies to direct stakes in companies including Intel Corp, minerals miner Trilogy Metals and rare earths miner MP Materials.
“We’re not going to come in and take stakes in non-strategic industries, but we’ve identified seven industries” to develop domestically, Bessent said. The government had to be “very careful not to overreach” and to ensure that investments were meeting its strategic goals, he added.
Bessent spoke days after Beijing announced fresh controls on the export of rare earth technologies and items, leading Trump to threaten 100% tariff on goods from China starting on 1 November. China is the world’s leading producer of the minerals used to make magnets crucial to the auto, electronic and defence industries.
US trade representative Jamieson Greer warned at a Wednesday press briefing that US plans for a tariff hike or other export controls were in the works.
“China’s announcement [on export controls] is nothing more than a global supply chain power grab,” he said. “This move is not proportional retaliation. It is an exercise in economic coercion on every country in the world.”
Bessent said US and Chinese officials were in touch to set up a meeting between Trump and Xi Jinping, adding that it was the level of trust between the two leaders that had prevented a further escalation of the trade conflict.
The US does not want to decouple from China, but would have to take action if Beijing proved to be an unreliable supplier, Bessent said, noting that Chinese officials recently told US auto companies that a slowdown in shipments of rare earth magnets was “probably something” to do with a holiday.
“Not only is China fuelling Russia’s war [in Ukraine], but China’s actions have once again demonstrated the risk of being dependent on them, on rare earths and for that matter, anything,” Bessent said, adding, “If China wants to be an unreliable partner to the world, then the world will have to decouple.”
With Reuters and Agence France-Presse
