And in addition to the title, I would add: "is it worth it for people to naively hope for peace (?!), and to try to look away, not noticing how 'this very peace' is increasingly, here and there, - as if someone is setting it on fire!!! 🤫🤔

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based on an article from the website - By WalletInvestor

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The Pentagon's actions to support Trump undermine investments in rare earth metals and challenge China's position.

President Donald Trump is changing the investment rules in the U.S. His administration is directly investing in companies critical to national security. Recently, the Pentagon acquired a stake in MP Materials, the only producer of rare earth metals in the country, worth $400 million. This move shocked the industry, as such direct intervention is almost unheard of, except in wartime or economic crises. Trump's strategy signals a shift from traditional free-market policies to more direct government control.

This decision is not just about profit. It is aimed at countering China's dominance in the rare earth metals sector, which are vital for electric vehicles, smartphones, and military equipment. Beijing has already imposed export restrictions on some rare earth metals, raising concerns about the vulnerability of U.S. supply chains. Trump's investments in rare earth metals are a direct response to this challenge. They also set a precedent for future government-supported projects in strategic sectors. Trump, the Pentagon, and market shock.
The Pentagon's deal with MP Materials has puzzled executives and policy experts in the mining industry. By becoming the largest shareholder, the U.S. government guarantees a minimum price level for rare earth elements, almost twice the current market price. Critics argue that this gives MP an unfair advantage, allowing it to undercut competitors while the government takes on the risks. Some say this resembles the Chinese model of state support for industry, which Washington has long criticized.

However, supporters see this as a necessary step to remove nearly complete Chinese control over the supply of rare earth elements. MP is also building a domestic magnet manufacturing plant, which Apple has already agreed to support by purchasing $200 million worth of magnets for iPhones and computers in advance. With Pentagon support, MP could dominate the U.S. rare earth market for years. However, this aggressive intervention also sparks debates about whether the government distorts free market principles. China's power in the rare earth sector and U.S. strategy.
China has virtually monopolized global rare earth metal production. This control has long served as a geopolitical tool, confirmed by the export restrictions imposed by Beijing, which shook global markets earlier this year. Rare earth metals are critical for everything from fighter jets to wind turbines, making them a key battleground in U.S.-China rivalry. Trump's decision to secure domestic supply chains is part of a larger strategy to reduce dependence on China.

Pentagon investments are not just a matter of the current market but also long-term national security. Analysts believe that without direct government support, American companies producing rare earth metals will not be able to compete with Chinese companies that receive significant subsidies. The Trump administration bets that government investments will eventually create a self-sufficient rare earth industry in the U.S. The question remains: can Washington balance market freedom with strategic intervention?
Trump's golden share and future investment trends.
Trump's influence extends beyond the rare earth market. He now holds a 'golden share' in U.S. Steel, giving him veto power over important company decisions. Such level of control is rarely seen in the U.S., but Trump calls it necessary to protect critical industries. Some experts argue that this resembles nationalization, but without the typical advantages of government ownership. Nevertheless, Trump's supporters see it as a bold way to keep strategic companies in American hands.

This new wave of government intervention may not stop here. Trump has proposed ideas such as acquiring shares in social media companies like TikTok to protect U.S. interests. Industry insiders believe that more stock deals may follow, especially in sectors where China poses a threat. Investors are now watching which companies may be the next candidates for this unconventional but effective form of support.
Investment amid Pentagon deals and risks related to China.
For investors, the Pentagon's direct involvement in companies like MP Materials is a double-edged sword. On one hand, these deals create strong, government-backed leaders in strategic sectors. On the other hand, they raise concerns about market distortions and long-term profitability. Prices for rare earth metals are already artificially supported due to Pentagon guarantees for a minimum price.

The Trump administration views this as a necessary cost to establish a reliable supply chain. However, critics warn that such intervention could have the opposite effect by stifling competition. Nevertheless, given China's increasing control over rare earth metal exports, many investors see Trump's strategy as a means of protection against geopolitical risks. Those who understand this new economic rivalry between the U.S. and China may find investments in rare earth metals a worthy opportunity.


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