US plans move to challenge China’s dominance in technology - The New York Times

The administration of Donald Trump has announced its intention to significantly expand the government’s stake in American companies operating in critical sectors.

The goal, officials say, is to reduce reliance on China and regain control over global supply chains of rare-earth minerals and advanced technologies.

US Treasury Secretary Scott Bessent said at the CNBC forum that China’s dominance in this sector requires Washington to adopt a more decisive industrial policy.

According to him, the new strategy envisions active government intervention in the defense, mining, and microchip manufacturing sectors.

“When you are facing a nonmarket economy like China, then you have to exercise industrial policies,” Bessent emphasized.

State returns to the economy

This policy marks a departure from the traditional free-market model the US has followed for decades. Under the renewed course, the government has already acquired stakes in companies such as US Steel, Intel, Trilogy Metals, and MP Materials, which specializes in rare-earth mining.

President Trump also ordered limits on Nvidia and AMD’s revenues from deals with China and directed the creation of a strategic mineral reserve in cooperation with major financial institutions, including JPMorgan Chase.

Bessent clarified that the government has identified seven priority sectors where it intends to strengthen oversight, including defense. He noted that US defense companies must invest more in innovation rather than in stock buybacks.

“I do think our defense companies are woefully behind in terms of deliveries,” he said, emphasizing the need to use mechanisms like minimum pricing and forward procurement to stabilize production chains.

Escalation with China

The escalation in economic relations stems from Beijing’s decision to introduce an export licensing system for goods containing rare-earth materials and technologies. These restrictions, which take effect later this year, effectively block raw material supplies to Western companies.

In response, Trump threatened to impose 100% tariffs on Chinese goods starting November 1 and to cancel a planned meeting with Xi Jinping. Later, following market backlash, he left room for possible negotiations.

“When we get an announcement like this week with China on the rare earths, you realize we have to be self-sufficient, or we have to be sufficient with our allies,” Bessent noted.

US Trade Representative Jamieson Greer called the Chinese measures a tool of economic coercion and accused Beijing of violating the trade truce.

The US also imposed fees on Chinese vessels, to which China responded with mirrored sanctions. Despite the growing tensions, both sides may meet in South Korea later this month.

British intelligence agencies are investigating large-scale cyberattacks that, according to sources, allowed China to access internal government systems and confidential materials for nearly a decade, including medium-security documents, diplomatic cables, and officials’ correspondence.

China’s largest airlines have appealed to US authorities not to impose a ban on the use of Russian airspace, warning that such a move would extend flight routes, increase ticket prices, and disrupt international operations.