US Treasury Secretary Scott Bessent signaled that Washington could extend a pause on tariffs on Chinese goods beyond the current three-month window if Beijing agrees to halt its planned export restrictions on rare-earth elements. Speaking at a press conference in Washington, Bessent said, “Is it possible that we could go to a longer roll in return? Perhaps. But all that’s going to be negotiated in the coming weeks.” His comments come as both countries navigate a fragile truce in their trade relationship, with the current 90-day tariff suspension set to expire on November 10.
According to Bloomberg, tensions have reignited after months of relative calm in the US-China relationship, following Washington’s move to expand technology export restrictions and propose new levies on Chinese vessels entering US ports. Beijing retaliated by outlining a set of stringent export controls on rare earths and other critical materials — a step that US officials fear could disrupt global supply chains for key industries. Economists see these tit-for-tat actions as strategic posturing ahead of a likely meeting between President Donald Trump and President Xi Jinping during the Asia-Pacific Economic Cooperation summit in South Korea later this month.
When asked whether the US and China were heading toward a full-scale trade war if talks failed, Trump replied bluntly, “Well, you’re in one now.” He later defended his tariff policy, stating, “We have a 100% tariff. If we didn’t have tariffs, we would be exposed as being a nothing.” His comments came after market trading closed in New York, while US equities had earlier extended gains following Bessent’s remarks. Futures indicated a mixed outlook in early Asia trading, with expected gains in Shanghai and Tokyo but declines in Hong Kong.
Bessent maintained that the United States is not seeking to harm China but rather to prevent it from dominating the global supply of rare earths, which are vital components in electronics, renewable energy technologies, and defense equipment. “We’re going to have a fulsome, group response to this,” he said earlier at a CNBC-hosted forum. “Bureaucrats in China cannot manage the supply chain or the manufacturing process for the rest of the world.” He added that Washington was coordinating with allies, including the European Union, Australia, Canada, India, and several Asian democracies, to develop a collective response.
US Trade Representative Jamieson Greer cast doubt on Beijing’s ability to enforce its proposed export restrictions, describing them as “unimaginable” in both scope and scale. He argued that China’s plan would severely disrupt global trade in consumer goods that contain even trace amounts of rare earths. The Chinese rules, announced last week, would require foreign companies to obtain government approval before exporting products containing Chinese-origin rare earth materials.
Bloomberg cited data from the US Geological Survey showing that China holds nearly half of the world’s rare-earth reserves — about 44 million metric tons — far surpassing Brazil, India, Australia, and the United States. This dominance gives Beijing significant leverage in the global supply chain, heightening US concerns that China could weaponize its resources in response to Washington’s trade measures.
Trump, meanwhile, has threatened to double tariffs on Chinese goods by November 1 and has even floated the idea of blocking trade in cooking oil as retaliation for China’s soybean restrictions. Still, Bessent said he believes there is a “very good chance” that he will meet with Chinese Vice Premier He Lifeng in Asia before the expected Trump-Xi meeting. The Treasury chief also hinted that trade-related announcements could coincide with Trump’s upcoming trip to the Association of Southeast Asian Nations summit in Malaysia, followed by visits to Japan and South Korea for the APEC leaders’ meeting.
Bessent said ongoing trade discussions with South Korea were nearly complete and that negotiations with Canada and India were “back on track.” He dismissed suggestions that recent market volatility could pressure the administration into concessions with Beijing, insisting that US trade policy is guided by national economic interests rather than stock market fluctuations. He also downplayed concerns about the dollar’s stability, arguing that changes in gold prices and interest rate differentials do not indicate fundamental weakness.
In a striking moment, Bessent criticized Chinese Vice Commerce Minister Li Chenggang, calling him “unhinged” after an August visit to Washington during which Li reportedly warned that China would “cause global chaos” if the US imposed port fees on Chinese ships. “Perhaps the vice minister has gone rogue,” Bessent said. “Maybe he thinks he’s a wolf warrior.” He accused Beijing of misrepresenting supply disruptions as the result of holidays, adding, “If China wants to be an unreliable partner to the world, then the world will have to decouple.”
Still, Bessent tempered his remarks by noting that “the world does not want to decouple” but rather to “de-risk.” However, he warned that China’s latest moves send troubling signals of economic disengagement that could accelerate the breakdown in global trade cooperation. As Bloomberg reported, with both Washington and Beijing using economic leverage as diplomatic weapons, the coming weeks will be pivotal in determining whether the two powers can step back from the brink of another full-blown trade war.
