Washington: The Trump administration will strengthen control over strategic sectors by taking more equity stakes in major companies to counter China’s economic policies and export restrictions.
Treasury Secretary Scott Besant said China’s dramatic new restrictions on rare earth minerals and magnets reflect the need for the US to be self-reliant in critical materials.
“So when you are facing a non-market economy like China, you have to have an industrial policy,” Besant said on the CNBC program.
Under President Donald Trump, the US has shifted from subsidies to direct stakes in companies including Intel Corp, mineral miner Trilogy Metals and rare earth miner MP Materials.
Higher shares are possible for sectors critical to US national security, including rare earths, semiconductors, pharmaceuticals and steel.
In rare earths, the administration will also set price levels and strategic reserves.
“We are not going to come in and take share in non-strategic industries, but we have identified seven industries for growth domestically,” Besant said.
The government had to be very careful not to overreach and ensure that investment was meeting its strategic goals.
Besant also criticized the functioning of some defense contractors and said that the government may have to put more pressure on them to improve performance.
“I think our defense companies are badly behind on deliveries, so as their largest customer we have to push them to do a little more research, a little less stock buybacks, which is really getting Boeing into trouble,” he said. – Reuters
