Bessent: China Made an Export Mistake in Critical Minerals

Supply Balancing Between the US and China

US Treasury Secretary Scott Bessent stated that China's threat to halt the export of rare earth elements is a serious mistake. Bessent expressed that it is not feasible for China to continue using these critical minerals as a leverage tool and noted that the US will take the necessary steps to turn to alternative supply sources within two years. These developments came to the forefront following the meeting between US President Donald Trump and Chinese President Xi Jinping in South Korea.

Discussions with China and Important Agreements

Bessent stated that the equilibrium point reached by both leaders reflects their willingness to make progress in order to break free from the ongoing tensions since spring. He reported that as a result of negotiations held in Malaysia last week, the Chinese government agreed to postpone the regulation of rare earth minerals while committing to purchase a large quantity of US soybeans, saying, "Provided that all conditions remain constant, we have reached a balance."

TikTok and the Approval Process

Another significant outcome of the discussions was the allowance for American investors to own TikTok's operations in the US. Bessent said regarding TikTok, "All approvals have been resolved, we will see a transaction soon." He also recalled that the US has postponed measures to add thousands of Chinese companies to the trade blacklist within this agreement framework.

The Fentanyl Issue and Tariffs

Bessent indicated that following the US's commitment to restrict the export of chemicals used in fentanyl production, Trump agreed to reduce tariffs from 20% to 10%, stating, "Naturally, there will be some hiccups, but we now have much better communication channels."

Foreseen Agreement in the Coming Weeks

Bessent expressed that an agreement could only be signed between the US and China next week and that he believes this will be permanent. Thus, there may be a new beginning in the trade relations between the two countries.