Bessent labeled it as “Bidenismo,” a not-so-subtle comparison to the late
Venezuelan leader Hugo Chavez’s socialist policies branded as Chavismo.
Today, Bessent is joining other Trump administration officials in saying that the U.S. government will now exercise more authority over the economy as President Donald Trump’s trade war against China re-enters a volatile phase. Beijing recently announced a rare-earth mineral export ban that’s more drastic than its initial version from the spring, with the
latest restrictions affecting products containing even a trace amount of Chinese material. They’re supposed to take effect in December. Since China enjoys a virtual monopoly in the refining of rare earths, the U.S. can’t easily secure another foreign supplier.
In response, the Trump administration is planning more government stakes in strategic industries, stacked on top of existing equity shares it holds in four privately-held
companies like U.S. chipmaker Intel and MP Materials, a rare-earth mining company. Price floors are also in play to ensure a predictable revenue flow for resources
susceptible to global price swings. ‘A much more interventionist approach’
Trump-world is borrowing a page from Beijing’s command-and-control economy, in which the state has a stronger hand with direct shares in firms and influence in their business
decisions.
“It definitely mimics that in it's a much more interventionist approach than what we're used to here with more state ownership of enterprises, and setting price floors,” said Stan Veuger, a senior fellow at the right-leaning American Enterprise Institute. “I find it difficult to imagine this would stop with a very narrow set of industries.”
Bessent has said Beijing will “neither command nor control” the U.S. That function will be left to others like him, Commerce Secretary Howard Lutnick and of course, Trump.
The horizon for government intervention has kept expanding. Lutnick has suggested the Trump administration should take a 50% cut of the revenue generated by university patents. He was a chief architect of the deal in which the federal government took a 15% share in Intel, rendering it a “national champion” in the U.S. chip industry.
Yet more federal activity to spur more private-sector investment in rare earths may be needed to diminish China’s enormous sway in rare earth mining.
Rare earths form through volcanic activity or other natural processes in Earth’s crust. They’re often
found in deposits mixed with other elements. So mining and refining them into separate elements that power everything from an iPhone to the cutting-edge F-35 fighter jet is time-consuming and expensive.
Kanika Singh, director of innovative finance at the Milken Institute, pointed to the 2010 Chinese rare earth embargo on Japan as a cautionary case study. The seven-week ban provoked panic in the Japanese industry, particularly for automakers who relied on Chinese materials to assemble their auto magnets. Once the ban was lifted, a major Tokyo-based firm
struck a deal with an Australian mining company to loosen Beijing’s grip on the rare earth sector.
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