US Will Set Price Floors to Shield Strategic Industries From CCP Influence: Bessent
Udumbara
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U.S. Treasury Secretary Scott Bessent confirmed on Oct. 15 that the United States will be using its investments in strategic industries to set “price floors” that will help shield those industries from price manipulation and market influence by the Chinese communist regime.
“For 20 years, anytime anyone in a market-based economy stood up a processor or refiner, China came in, cut [the] price, and put them out of business,” Bessent said on CNBC.
“So we’re going to set price floors and have forward buying to make sure that this doesn’t happen again. And we’re going to do it across a range of industries.”
Several such investments have been announced in recent weeks.
“They’re anxious to work with us. ... We have a strategic petroleum reserve, we’re going to need a strategic mineral reserve. And the private sector is coming in,” he said.
Bessent said the Trump administration’s approach is a balancing one, meant to offset the entry of a non-market player like China, dismissing concerns that this centralizes industries the same way as socialist governments. He pointed out that he argued against centralizing industries just last year.
“We’re not going to come in and take stakes in non-strategic industries,” he said. “We do have to be very careful not to overreach, and we need to go back and examine, OK, have we accomplished our goal? And then you can move on.”
“But we have to be vigilant,” Bessent added, bringing up the Magnequench example he has used several times in recent media appearances.
In 1995, General Motors sold its Magnequench division in a move that gave the automaker greater access to the Chinese market. This sale also provided China with the technology needed to produce rare earth magnets, which the country is now seeking to leverage against global partners.
Bessent pointed out that the United States added a requirement that the magnet company remain in the United States for five years after the sale, and as soon as that deadline expired, the new owners moved the company to China.
“Nobody was watching; everyone’s asleep at the switch. So we’re just not going to be asleep at the switch,” he said.
Bessent has stressed that the United States does not want to decouple from China, even if Beijing’s latest rare earths restriction seems to necessitate it, but that derisking in strategic industries is necessary.
“When we get an announcement like this week with China on the rare earth, you realize we have to be self-sufficient, or we have to be sufficient with our allies,” he said.
“When you are facing a non-market economy like China, then you have to exercise industrial policies.”
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