The Trump administration is normalizing the idea that the federal government should take partial ownership in private companies under the guise of strengthening vulnerable supply chains. An example of this is the administration’s plan to take an ownership stake in Vulcan Elements, a rare-earth magnet startup.

While the strategic concern is real, partial federal ownership of private companies is both unnecessary and undesirable. If Washington wants more domestic rare-earth magnet capacity, why not just buy the magnets? Clearly, regulatory obstacles exist, but letting firms compete rather than try to pick “champions” would be the preferable market approach.

Rare earths aren’t actually rare or difficult to find on Earth, except for certain heavy rare earth elements. The bigger challenge is the fragmented supply chain, which includes separation, refining, metallization, alloying, and converting these materials into usable end products such as high-performance permanent magnets. Those magnets, especially neodymium-iron-boron (NdFeB) magnets, are used in semiconductor manufacturing equipment, industrial motors, drones, satellites, and fighter jets.

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