Trump aide blames China for 'damaging global economy' after rare earth curb

Bessent argued that China's restrictions on critical minerals reflect internal economic challenges and a desire to drag the rest of the world along with it

Don't want to miss the best from Business Standard?

US Treasury Secretary Scott Bessent has accused China of attempting to "damage the global economy" following Beijing’s introduction of extensive export restrictions on rare earth elements and critical minerals, according to a report by the Financial Times.

 

Bessent argued that China’s move, expected to disrupt international supply chains, reflects internal economic challenges and a desire to drag the rest of the world along with it.

‘China will be hurt the most’

Highlighting that China is the largest global supplier of these materials, Bessent said, “Maybe there is some Leninist business model where hurting your customers is considered a good idea… but if they aim to slow down the global economy, they will be hurt the most.” 

 

He claimed that China is currently facing a recession and is attempting to “export its way out of it". However, Bessent warned that this strategy is likely to worsen China’s position on the global stage.

US mulls 100% tariffs on China

Bessent's remarks came after China announced broad restrictions on rare earth and critical mineral exports, prompting US President Donald Trump to threaten a 100 per cent tariff on Chinese imports starting November 1.

 

On China's move, Trump posted on Truth Social: “Don’t worry about China, it will all be fine! Highly respected 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!!!”

Trump on track to meet Xi

US officials were reportedly surprised by what they viewed as "China’s disproportionate restrictions on critical mineral supplies", the Financial Times reported. The move comes just weeks before Trump is expected to meet Chinese President Xi Jinping.

 

According to Reuters, Bessent has assured that Trump remains on track to meet Xi in South Korea in late October, where the two sides will try to de-escalate tensions over tariff threats and export controls.

US has countermeasures in place

The US had already drafted potential countermeasures if an agreement could not be reached, the Financial Times report noted, adding that the issue would be a priority at the upcoming G7 meetings in Washington this week, alongside World Bank-IMF discussions.

 

The report also highlighted that the US is considering requiring licenses for companies exporting software to China, a move that could have significant consequences for Chinese industries.