The US Treasury Secretary Drops the Pretense: To Deal with China, Industrial Policy Must Be Used
The Western-style "fair competition" and "free market" approach is no longer sustainable. The US government is now attempting unprecedented industrial policy interventions, increasing direct control over domestic companies in an effort to counter China's dominant position in rare earths and critical minerals.
On October 15th local time, US Treasury Secretary Bensons disclosed this intention at a forum. He revealed that the Trump administration is seeking to respond to China's new economic initiatives by strengthening control over companies in key strategic areas of the United States.
Analysts point out that this approach marks the beginning of a new era for US industrial policy, which stands in sharp contrast to the traditional philosophy of policymakers who emphasized "free markets" and "open investment."
The report states that as China's dominance in the production of rare earth minerals and battery technology continues to rise, President Trump hopes to adopt China's economic strategy, by holding more shares in American companies deemed closely related to national security, to exert more control over their output. The goal is to reduce America's reliance on China in sensitive technologies, thereby weakening China's ability to exert pressure through technological supply chains.
Benson said during a "Investing in America" forum hosted by CNBC that when facing an economy like China, industrial policy must be used.
Benson stated that China's announcement last week of new export controls on rare earths is one of the reasons why the US must strengthen state control over enterprises. "When we saw this announcement from China on rare earths this week, we realized we must achieve self-sufficiency or ensure sufficient supply with allies," he said.
The Trump administration has taken equity stakes in several key companies, including US Steel, Intel, rare earth mining company MP Materials, and Trilogy Metals. At the same time, it has also requested a share of chip sales revenue from NVIDIA and AMD in China.
Benson said establishing a "strategic mineral reserve" is a priority, and he mentioned that JPMorgan Chase is interested in cooperating with the government.
He said the Trump administration has identified seven strategically significant industries, and the government may further strengthen its control in these areas. He specifically mentioned the defense industry, pointing out that the US government is the largest or even the sole customer of some defense companies, and therefore can ask companies to reduce stock buybacks and increase R&D spending.
Original: www.toutiao.com/article/1846107054298122/
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