AsianFin -- The Trump administration is issuing threats while opening the door for a deal with China, highlighting its urgency of action in the face of Beijing’s new export controls on key sources for technology.
AI Generated Image
U.S. Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer in a press conference on Wednesday condemned China’s plan to tighten export control on rare earth and related technology, claiming the country violated an accord previously reached with the United States. Bessent called China’ actions a “highly provocative move”, and Greer described the move as a ”global chain power grab” and an “exercise on economic coercion on the global economy.”
Bessent threatened China with decoupling if Beijing insists on such behavior. "If China wants to be an unreliable partner to the world, then the world will have to decouple," Bessent said. He suggested the U.S. and its trading partners would work on a unified response to China’s export restrictions. “This is China versus the world,” he said. “We and our allies will neither be commanded, nor controlled.”
At the same time, Bessent and Greer left the door open to negotiation, and showed cautiously optimistic that China would back away from its plan and return to the negotiation table. They also floated possible further extension of the pause on U.S. tariffs if China, which owns almost half of the world’s rare earth reseres, lifts export restrictions.
“I believe China is open to discussion, and I am optimistic that this can be de-escalated ultimately,” Bessent said. “We’ve had substantial communication with the Chinese over the past few days, and we believe that there will be more forthcoming this week.”
Bessent said U.S. President Donald Trump is still expected to meet Chinese leader Xi Jinping at a APEC summit in South Korea in the coming weeks. He pointed out that the current 90-day tariff truce between the U.S. and China could be extended, but that would not be discussed before heads of two states meet. “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,” Bessent said.
Greer questioned the feasibility of China’s new restrictions. "The scope and the scale is just unimaginable, and it cannot be implemented," he said. “Our expectation is that they won’t implement [the controls] and that we’ll be able to be back to where we were a week ago,” Greer said, “where we had the tariff levels we’ve agreed to and we have the flow of rare-earth magnets we agreed to.”
Trump last Friday warned he would impose an additional 100% tariffs and software export controls on China as the retaliation for Beijing's recent rare earth export controls.The United States will impose an additional 100% Tariff on Chinese imports, starting on November 1 or sooner, depending on any further actions or changes taken by China, and export controls on “any and all critical software” will go into effect on November 1, Trump wrote in a Truth Social post.
Asked whether the U.S. and China are are in for a sustained trade war if they cannot reach a trade deal, Trump on Wednesday replied: “Well, you’re in one now.” “We have a 100% tariff. If we didn’t have tariffs, we would be exposed as being a nothing,” the president said.
The only way China can dodge the new tariffs is to remove its planned export controls, Greer told NBC News on Wednesday.
Commenting on Trumps’ threat last Friday, Chinese foreign ministry spokesperson Lin Jian on Monday said that China firmly rejects the recent U.S. restrictions and sanctions on China, and will do what is necessary to protect its legitimate rights and interests. Threatening high tariffs is not the right way to deal with China, Lin said, citing remarks of a spokesperson for China's Ministry of Commerce (MOFCOM).
Lin Jian in a social media post Wednesday reiterated China’s stance. “China’s position has been consistent and clear. It is the U.S. who asks for talks while threatening high tariffs and new restrictions,” Lin wrote on X. Lin urge the U.S. to correct its wrong approach as early as possible and address relevant issues through dialogue and consultation on the basis of equality, respect and mutual benefit.
