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Treasury Secretary Scott Bessent issued a warning to Beijing regarding its new extensive export controls on rare earths and critical minerals, stating that it could lead to the US and other nations disconnecting from China.
During a joint news conference with US Trade Representative Jamieson Greer, Bessent emphasized that China’s actions were challenging the entire world.
“If China chooses to be an unreliable partner on the global stage, then countries may have no choice but to decouple,” Bessent remarked. “While the preference is to reduce risk rather than decouple, actions like these signal a potential separation, which we believe China does not desire.”
China recently introduced a regime for rare earths and critical minerals that will mandate non-Chinese companies exporting products containing even small quantities of these minerals to obtain a government license.
This move has elicited strong reactions from the US and other countries, who fear its impact on global supply chains due to China’s dominance in the rare earths industry. President Donald Trump even threatened to impose a 100% tariff on imports from China and implement additional countermeasures by November 1.
Greer highlighted that China’s export controls, set to take effect in December, would have global repercussions.
“Despite China taking various retaliatory trade actions against the US, Europe, Canada, Australia, and others in recent times, this latest move goes beyond mere retaliation. It represents economic coercion towards all nations,” Greer stated.
Both Greer and Bessent made it clear that the US would demand China refrain from enforcing these controls.
Greer noted that the rule granted China significant influence over the global economy and technology supply chain. “This will impact not only advanced technology products like AI systems, but also everyday consumer goods such as cars, smartphones, and potentially household appliances,” he added.
China defended its rare earth controls by citing punitive measures imposed by Washington on Chinese companies following the fourth round of trade talks in Madrid. However, the US dismissed this justification, suggesting that China had been planning these measures for some time.
Bessent and Greer also criticized Li Chenggang, a top negotiator in the Chinese trade team, for his behavior during a visit to Washington in August, where he made threatening remarks about global chaos if the US proceeded with a new policy on fees for Chinese ships docking at American ports.
Despite these tensions, Bessent expressed optimism about a meeting between President Trump and President Xi Jinping in South Korea on October 29 during the Asia-Pacific Economic Cooperation forum.
The Treasury Secretary remains hopeful that the situation can be de-escalated, but emphasized that the Trump administration is prepared to respond with firm actions if China does not cooperate.
Some experts speculate that Beijing’s implementation of the rare earths export control program is a strategic move to pressure the US into easing its export controls on semiconductor and chip-related technology.
When asked about the possibility of the US including its export controls in negotiations, Bessent declined to provide specifics but acknowledged that China’s decision to delay the implementation of the export control regime would be a significant factor.
As the US and China navigate their trade relationship, the looming deadlines for tariffs and negotiations suggest a crucial period ahead in determining the future of their economic ties.