Scott Besant accuses China of trying to harm the global economy

US Treasury Secretary Scott Besent accused China of trying to harm the global economy after Beijing imposed sweeping controls on exports of rare earths and critical minerals, hurting global supply chains.

China, Besant told the Financial Times Introduction of controls – Three weeks before US President Donald Trump’s expected meeting with his Chinese counterpart Xi Jinping in South Korea – reflects the problems in its economy.

“This is a sign of how weak their economy is, and that they want to drag everyone down with them,” Besant said Monday.

“There may be some Leninist business models where hurting your customers is a good idea, but they are the biggest supplier to the world,” he added. “If they want to slow down the global economy, they will be hurt the most.”

“They are in the middle of a recession, and they are trying to export their way out of it,” Besant added. “The problem is that they are worsening their position in the world.”

The US Treasury Secretary spoke to the Financial Times days after China unveiled expanded restrictions on rare earths and vital mineral supplies, prompting Trump to… Threatening to impose an additional 100 percent tariff on imports from China as of November 1.

One of the people familiar with the situation said that the United States has drafted the countermeasures it will take if the two sides do not reach an agreement. The source said that the United States will prioritize this issue when G7 ministers meet in Washington this week to attend World Bank and International Monetary Fund meetings.

Two other people familiar with the situation said the United States is considering requiring companies exporting software to China to obtain a license, which could have a major impact on Chinese industries.

US officials were caught off guard by what they saw as China’s disproportionate move to restrict supplies of vital minerals, ahead of a South Korea summit during the Asia-Pacific Economic Cooperation meeting in late October.

But they said Li Qinggang, the chief trade negotiator for Deputy Premier He Leveng — Besant’s counterpart — issued threats to Washington in the summer.

“In August, Li Qinggang reviewed several of China’s current lines of attack that have developed over the past week,” a senior US official told the Financial Times. “He was very agitated and aggressive when he said that the United States would face ‘hellfire’ if things did not go his way.”

The official added that Lee did not mention rare earth elements specifically, but “he said we will respond beyond all expectations.” “China is trying to refill the narrative that Li actually laid out months ago.”

Earlier on Monday, Besant said it was possible that Xi was not aware of the rare earth announcement. The senior American official said that there is a dispute between government agencies in Beijing that affects the US-Chinese negotiations.

“We think there is an internal dynamic between the Finance Ministry and the Commerce Ministry,” the senior official told the Financial Times. “Their trade department — including mine — is much more provocative.”

“The hardliners are the Ministry of Commerce and the Ministry of State Security, and the Department of Homeland Security has taken on a much larger role in the economy,” the official added.

China blamed Washington for the escalation. On Sunday, she pointed to recent actions by the United States, including the Commerce Department placing thousands of subsidiaries of Chinese companies on a trade blacklist.

Another senior US official said Beijing was using the US Commerce Department’s action, introduced in late September, as a “total excuse” to move forward with a policy that had been in the works for some time.

“They couldn’t come up with something this detailed in two weeks,” he said, referring to controls imposed by Beijing on the export of rare earth elements. “The thing that was surprising is that they would do something so disproportionate. We try to stay proportionate. But they don’t do it.”

The first US official said Trump decided to publicly criticize China on Friday after Beijing refused to participate in the discussions.

“We basically had a 36-hour period after the order came out where we expressed interest in talking to them,” the first US official said. “But they didn’t want to talk, so we made it public, and then all of a sudden they wanted to talk.”

US and Chinese officials met in Washington on Monday following what Picent described as “substantial communications” between the two countries over the weekend.

Besant expects to meet him again before Trump and Xi meet in South Korea on October 29.

One person familiar with the situation said China originally wanted the Besint-He meeting to be held after the APEC summit. But he said China had now “changed its tune” and wanted the two officials to meet before Trump and Xi met.

The second US official said the administration is not concerned that Trump’s proposed new tariffs on China will lead to market turmoil similar to that which followed his sharp escalation of tariffs to 145 percent in April.

“We are now in a more stable position with the rest of the world, and our trade deficit with China has already decreased by 25 percent this year,” the official said. “We also have much greater leverage in terms of unity with Western and Asian democracies.”

On Sunday, Trump posted on Truth Social what Xi said He had a “bad moment” And the United States wants to help China. Some observers interpreted this post as a softening of Trump’s tone. But one person familiar with the matter said he was “preying” on the Chinese leader.

China on Tuesday struck a more conciliatory tone, urging the United States to “take steps toward cooperation” with Beijing, and noting that the two sides held talks on Monday.

Additional reporting by Joseph Leahy in Beijing