Bessent, U.S. Treasury: "Strengthen control over companies in key strategic sectors to respond to China"

The U.S. government plans to significantly strengthen control over its domestic companies in core industries related to national security in order to respond to China’s new economic measures. The aim is to reduce dependence on China for critical resources such as rare earths.

U.S. Treasury Secretary Scott Bessent said on the 15th (local time) at a forum hosted by CNBC that "the Donald Trump administration is considering a plan to designate seven industries of strategic importance and expand direct government control." However, he did not specify which seven industries would be promoted. The New York Times (NYT) reported that "the seven strategic industries include the defense industry, semiconductors, rare earths, aircraft, advanced weaponry, batteries, and critical materials industries."

Bessent also noted that "especially in the defense sector, because the government is a major customer, companies can be required to invest more funds in research and development (R&D) rather than dividends or share buybacks," adding that "defense contractors are currently seriously lagging in areas such as delivery delays."

He also emphasized solidarity with allies regarding China’s export controls on rare earths. Bessent said, "We must either develop our own supply capability or have the ability to procure from our allies," and "we will prevent this from happening again through minimum price settings and forward trading, and do so across multiple industrial sectors." CNBC reported that "Bessent also announced a plan to increase government ownership stakes in companies in key strategic sectors."

This move is markedly different from the United States' traditional economic stance that has valued free markets and open investment. The Trump administration has already secured government stakes in companies including U.S. Steel, Intel, Trilogy Metals, and MP Materials. The NYT analyzed that "President Trump is considering adopting parts of the Chinese-style industrial policy model, with the government directly intervening in core companies tied to national security to secure control over production and technology."

Donghyun Kim, reporter 3code@hankyung.com