The Trump administration will set price floors across a range of sectors to combat market manipulation by China, Treasury Secretary Scott Bessent told CNBC in an exclusive interview on Wednesday.
China has driven foreign competitors in the rare earth sector out of business over the past two decades by using its global dominance in refining and processing to undercut prices, Bessent said.
“When you’re faced with a non-market economy like China, then you have to exercise industrial policy,” Bessent told Sara Eisen at CNBC’s “Invest in America Forum” in Washington, DC.
“So we’re going to set price floors and forward purchases to make sure that this doesn’t happen again and we’re going to do that across a whole range of sectors,” the Treasury secretary said.
The United States also needs to build a strategic mineral reserve, Bessent said. JPMorgan Chase wants to work with the Trump administration to establish such a reserve, he said.
Rare earths are used to produce magnets that play a crucial role in U.S. weapons systems like the F-35 fighter jet and Tomahawk cruise missiles. Rare earth magnets are also essential for civilian commercial applications like electric vehicles.
The Trump administration is working to establish a domestic rare earth supply chain. The Department of Defense reached an unprecedented agreement in July with MP materials, the largest rare earths miner in the United States, which included an equity stake, floor price and offtake agreement.
China last week announced drastic new restrictions on rare earth exports ahead of a planned meeting between President Xi Jinping and President Donald Trump in South Korea later this month. In response, Trump threatened to impose additional 100% tariffs on China.
The United States could take stakes in other companies as a result of Beijing’s restrictions on rare earths, Bessent told CNBC.
“I wouldn’t be surprised,” the Treasury secretary said when asked about additional equity stakes. “When we get an announcement like this week about China on rare earths, you realize we have to be self-sufficient, or we have to be sufficient with our allies.”
The Trump administration will not take stakes in non-strategic sectors, Bessent said. “We have to be very careful not to go too far,” he said.
Shares of rare earth and critical minerals mining companies have rebounded in recent sessions as investors speculate on which companies could become future targets for the Trump administration’s industrial policy.
