U.S. Treasury: "China's rare earth threat is a mistake... China's leverage won't last two years"

"When Trump mentioned a visit to China early next year, Xi Jinping suggested April, saying 'February is too cold'"

U.S. Secretary of the Treasury Scott Bessent [Photo provided by Yonhap News Agency. Reproduction and redistribution prohibited]

U.S. Secretary of the Treasury Scott Bessent stated that China's use of rare earths as a bargaining chip amidst the trade war with the United States was a mistake, and predicted that China's influence related to rare earths would not last more than two years.

Bessent made these remarks in an interview with the British daily Financial Times (FT), published on the 31st (local time).

Regarding China's use of rare earths as a weapon, Bessent said, "I don't think China can implement this because we (the U.S.) currently have offsetting measures," and stated that China's leverage over the U.S. concerning rare earths would not last more than 12 to 24 months.

Bessent further emphasized, "China alerted all countries to the risks. They really made a mistake," adding, "There's a difference between putting a gun on the table and firing a gun in the air."

Bessent commented on the agreement reached at the U.S.-China summit between U.S. President Donald Trump and Chinese President Xi Jinping held in South Korea on the 30th, where both sides agreed to a truce in the tariff and trade war for the next year, stating, "If other circumstances remain unchanged, we have reached an agreement that we have achieved a balance point."

He also noted that it was clear the two leaders respected each other, saying, "Although President Xi expressed concerns, he clearly wanted to find areas for cooperation with President Trump."

He added, "Both sides hoped to meet in one room and make progress, rather than continue the unstable situation that has persisted since spring. They recognized that stability between the two countries is important for both sides and the global economy."

Regarding the acquisition of the U.S. business rights of the Chinese video platform TikTok, Bessent stated, "Everything related to the approval (from China) has been resolved, and we will see the deal soon."

Bessent also refuted the view that the agreement was merely a stopgap measure and that the U.S. would find it difficult to demand structural reforms from China to address issues like overproduction.

He said, "The Global South cannot absorb (China's overproduced goods), so they are going to the European Union (EU), the United Kingdom, Australia, Canada, and Japan," and mentioned that these countries have also imposed or are planning to impose tariffs on China.

Bessent explained that China's input was reflected in President Trump's plan to visit China in April of next year.

Bessent recounted that when President Trump said during the meeting, "I believe you would want me to visit early next year," President Xi replied, "February is very cold. How about postponing it to April?" Yonhap News Agency