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U.S. boosts taxpayer-backed stakes in China-linked strategic industries
Treasury Secretary Scott Bessent said industrial policy is needed to respond to a non-market economy like China, while critics warn the government should avoid overreach and reassess investments’ results.
The U.S. government has deployed billions of taxpayer dollars over the past year to buy stakes in companies viewed as strategically important for competing with China, shifting from grants, loans, and tax incentives toward direct ownership, according to Yahoo Finance. The investments cover industries including semiconductors, rare earths, lithium, and quantum computing. In late July, the outlet said the government’s largest prominent holdings included a 9.9% stake in Intel obtained through $11.1 billion in previously authorized funding, and an approximately 15% stake in MP Materials, which operates the only active rare earths mine in the U.S.
Yahoo Finance also said Washington acquired stakes in companies including Lithium Americas and its Thacker Pass project, Trilogy Metals, USA Rare Earth, and other businesses. It added that these moves followed Treasury Secretary Scott Bessent’s explanation in a CNBC interview, where he argued industrial policy is necessary when facing a non-market economy like China.
The outlet noted that early outcomes appear mixed. It said government backing can draw attention and that stock reactions have occurred, including a surge in Lithium Americas shares after reports emerged Washington was considering an equity stake, but it emphasized that durable success depends on whether the investments achieve their intended goals, a point Bessent highlighted when he cautioned the government must not overreach.