In the long and uneasy story of rival powers trying to keep their economic quarrel from turning into open rupture, a new chapter opened this week when China widened its control over rare earths, the minerals that quietly run modern machines, and the United States answered with the threat of steep new tariffs. Now the Treasury Secretary says both capitals are lowering the heat, and a meeting between Donald Trump and Xi Jinping remains on the calendar for late October in South Korea, around the Asia-Pacific summit. Whether this is a true retreat from escalation or only a pause before the next bl
Trump Still Set to Meet Xi in South Korea, Bessent Says, as US-China Tensions Ease
"China is a command and control economy. They are neither going to command nor control us."
Mark
Bessent says things have 'substantially de-escalated.' What actually changed over the weekend?
Mimi
By his account, the two sides talked a lot. He described substantial communications and said lines of communication had reopened. Also, Trump's tariffs wouldn't start until Nov. 1, so there's a window.
Mark
And the Trump-Xi meeting is still planned?
Mimi
Yes, in South Korea in late October, around the APEC summit. Bessent said he believes it's still on.
Luke
Worth noting that's Bessent's belief, stated in a TV interview. The reporting here doesn't include confirmation from Beijing about the meeting.
Mark
What did China actually do that set this off?
Mimi
It expanded rare earth export controls. Foreign firms making certain rare earths and magnets would need a Chinese licence if the product contains or is made with Chinese equipment or material, even with no Chinese company in the deal.
Mark
So it reaches far beyond China itself.
Mimi
Exactly, and China dominates that market, which is why it matters for tech manufacturing.
Luke
And de-escalation is a one-sided description so far. Bessent also said the US would reject the licensing requirements, and China called the tariff threat hypocritical. Neither position has visibly moved.
Mark
The markets reacted strongly?
Mimi
The S&P 500 fell more than 2 per cent Friday, its biggest one-day drop since April. The dollar edged up Monday on hopes of a softer approach.
Luke
Hopes, though. Nothing yet says the tariffs are off. Bessent only said they don't have to happen.
El Pulso
- A surprise Chinese expansion of rare earth export controls collided with a threatened 100 per cent tariff from Washington, and the two largest economies found themselves in a dangerous spiral.
- Global markets reeled as the S&P 500 fell more than 2 per cent on Friday, its sharpest one-day drop since April, and the dollar wavered on hopes of restraint.
- Both governments are reaching for the back channel, with weekend communications, staff-level talks in Washington this week, and a Trump-Xi meeting still planned for South Korea.
- Rhetoric remains sharp, with Beijing calling the tariff threats hypocritical and Washington vowing to reject Chinese licensing demands, so the truce is still fragile.
- The November 1 tariff date now hangs over the talks, and whether those duties actually take effect will determine if de-escalation holds.
In the long and uneasy story of rival powers trying to keep their economic quarrel from turning into open rupture, a new chapter opened this week when China widened its control over rare earths, the minerals that quietly run modern machines, and the United States answered with the threat of steep new tariffs. Now the Treasury Secretary says both capitals are lowering the heat, and a meeting between Donald Trump and Xi Jinping remains on the calendar for late October in South Korea, around the Asia-Pacific summit. Whether this is a true retreat from escalation or only a pause before the next blow is a question the calendar, and the deadline of November 1, will eventually answer.
On Monday, October 13, US Treasury Secretary Scott Bessent told Fox Business that the planned meeting between President Donald Trump and Chinese leader Xi Jinping in South Korea was still going ahead. The two are expected to meet in late October, around the Asia-Pacific Economic Cooperation summit that South Korea is hosting, and both sides are now working to cool a trade dispute that had nearly boiled over.
The trouble began on Thursday, when China announced a sweeping expansion of its export controls on rare earths. Trump responded on Friday with a threatened 100 per cent tariff on Chinese goods, and the exchange sent markets and relations between the world's two largest economies into a tailspin.
Bessent said the weekend had brought substantial communication between the governments, with more meetings to come. "We have substantially de-escalated," he said, noting that Trump had set the tariffs to take effect no earlier than November 1. Staff-level talks are expected in Washington this week, on the sidelines of the World Bank and IMF meetings. "The 100 per cent tariff does not have to happen," he said.
The conciliatory tone had its limits. Bessent called the Chinese move provocative, said Washington had pushed back hard, and claimed support from allies in Europe, India and Asia. Beijing, meanwhile, blamed the United States for the escalation, called the tariff threat hypocritical, and defended its curbs, which matter because China dominates the supply of the elements essential to much of modern technology.
The new rules reach beyond China's borders. Foreign firms producing certain rare earths and magnets will need a Chinese export licence if their products contain or were made with Chinese equipment or materials, even when no Chinese company is involved.
Markets felt the shock. The S&P 500 fell more than 2 per cent on Friday, its biggest one-day drop since April, and on Monday the dollar edged up on hopes that Washington would temper its escalation.
All eyes now turn to three things: the Washington talks, whether the Trump-Xi meeting in South Korea goes ahead, and whether the November 1 tariff date arrives with tariffs actually in force.
On Monday, Oct. 13, US Treasury Secretary Scott Bessent went on Fox Business Network and said the planned meeting between President Donald Trump and Chinese leader Xi Jinping in South Korea was still on. The two men are expected to meet in late October, around the Asia-Pacific Economic Cooperation summit that South Korea is hosting, and Bessent said the two sides were working to bring down the temperature of their trade dispute.
The latest rupture began on Thursday, when China announced a dramatic expansion of its export controls on rare earths. Trump answered on Friday with a sharp countermeasure, a threatened 100 per cent tariff on Chinese goods. The exchange sent markets and relations between the world's two largest economies into a spiral.
Bessent said the weekend brought substantial communications between the two governments, and that more meetings were expected. "We have substantially de-escalated," he said. He pointed out that Trump had said the tariffs would not take effect until Nov. 1, and added that he believed the meeting with Xi, whom he referred to as Party Chair, would still go ahead. He also said staff-level US-China meetings would take place this week in Washington, on the sidelines of the annual gatherings of the World Bank and the International Monetary Fund. "The 100 per cent tariff does not have to happen," he said, adding that the relationship was good despite the previous week's announcement and that lines of communication had reopened.
The conciliatory tone had limits. Bessent described the Chinese move as provocative and said Washington had pushed back aggressively. He said the US had been in contact with allies and expected support from the Europeans, India and democracies in Asia. "China is a command and control economy," he said. "They are neither going to command nor control us." In the same interview, on "Mornings with Maria," he said the United States would reject licensing requirements from China.
Beijing, for its part, blamed the United States for the rising tensions on Sunday. It called Trump's threatened 100 per cent tariffs hypocritical and defended its curbs on exports of rare earth elements and related equipment. China dominates the market for these elements, which are essential to tech manufacturing.
The new rules reach well beyond Chinese borders. Under them, foreign companies producing some of the listed rare earths and related magnets will also need a Chinese export licence if the final product contains, or was made with, Chinese equipment or material. That requirement applies even when no Chinese company is part of the transaction.
Markets felt the shock. Trump's unexpected broadside on Friday shook global financial markets and sent the benchmark S&P 500 Index down by more than 2 per cent, its biggest one-day drop since April, when a steady run of tariff announcements had stoked volatility. On Monday the dollar edged up as investors hoped Washington would temper its latest escalation after Friday's selloff.
What to watch now is the week's staff-level talks in Washington, whether the Trump-Xi meeting in South Korea holds, and whether the Nov. 1 tariff date arrives with the tariffs actually in force.
Citas Notables
We have substantially de-escalated.— US Treasury Secretary Scott Bessent, Fox Business Network
The 100 per cent tariff does not have to happen.— US Treasury Secretary Scott Bessent
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