WASHINGTON: The US-China trade war deepened this week after Beijing tightened export controls on rare earth minerals, prompting sharp criticism from US Treasury Secretary Scott Bessent, who accused President Xi Jinping’s regime of taking “provocative” steps against the global economy.
Speaking to Fox Business on Monday, Bessent said, “This is China versus the rest of the world. They’ve announced export controls going into effect next month, and we’ve pushed back aggressively. We’re not sure why they chose to do this now.”
He warned that the US would not allow China to weaponize its dominance in rare earths — critical for defense, EVs, and electronics — saying, “They’ve pointed a bazooka at the industrial base of the free world. But we won’t let them command or control us.”
Bessent said Washington was working closely with India, Europe, and Asian democracies to coordinate a collective response. “We’ve already reached out to allies and will meet this week. I expect strong support from the Europeans, from the Indians, from democracies in Asia,” he added.
Beijing’s new restrictions
China’s new rules, announced on October 9, require government approval for any export containing over 0.1% rare earths by value, expanding the list of restricted minerals and banning exports for foreign military use.
Beijing, which controls nearly 70% of global rare earth mining and 90% of processing, said the move was to “protect national security” amid “frequent military conflict.”
Among the most vital elements is dysprosium — used in EV motors, wind turbines, semiconductors, and defense systems. Bessent compared its importance to baking powder in a bakery: “used in small quantities but absolutely essential.”
Trump’s tariff threat
President Donald Trump escalated tensions Friday, announcing plans to double tariffs on Chinese goods, raising total levies to roughly 130%. Calling China’s move “extraordinarily aggressive,” Trump said the US would take “strong measures to defend our industries.”
Later, however, he sought to reassure markets on Truth Social: “It will all be fine. President Xi just had a bad moment. He doesn’t want depression for his country, and neither do I. The USA wants to help China, not hurt it!”
Wall Street analysts have nicknamed Trump “TACO” — ‘Trump Always Chickens Out’ — referencing his habit of softening aggressive tariff threats.
‘China is hurting itself’
Bessent told The Financial Times that Beijing’s export curbs reflected economic weakness, not strength. “Maybe there’s some Leninist business model where hurting your customers makes sense, but as the world’s biggest supplier, they’ll be the ones hurt most,” he said, accusing China of being in a “recession or depression” and trying to “drag everyone down.”
‘US will do whatever it takes’
Despite the rhetoric, Bessent said Washington aims to stabilize supply chains, not decouple from China. “Everything’s on the table. We want to de-risk, not decouple. The US will not be deterred here,” he said.
Trump–Xi meeting expected in South Korea
Despite rising friction, Bessent confirmed that Trump and Xi Jinping are expected to meet later this month in South Korea, though the escalating dispute could complicate scheduling. Staff-level talks are planned during the IMF and World Bank meetings in Washington, followed by further discussions between Bessent and Chinese Vice Premier He Lifeng.
The coming weeks will determine whether the world’s two largest economies can de-escalate the rare earth conflict — or whether it becomes the next flashpoint in an increasingly fractious global trade order.
