Top Chinese, US negotiators raise tensions as trade war rhetoric escalates to 'unhinged'

China pushed back against American accusations on Thursday, saying Washington is creating unnecessary alarm about its new rare earth export regulations.

The response came after Treasury Secretary Scott Bessent criticized a senior Chinese trade official, with Beijing calling his statements badly misleading and rejecting demands to withdraw the upcoming restrictions.

The Communist Party’s main newspaper released a detailed seven-point response following comments from senior American trade officials. Those officials had indicated that Beijing might dodge President Donald Trump’s warning of 100% tariffs on Chinese imports by canceling the restrictions scheduled to begin November 8.

Markets have welcomed signs that the world’s two largest economies haven’t returned to the damaging tariff battles seen in March and April. However, each sharp exchange between the two countries puts at risk a planned meeting between Trump and Chinese leader Xi Jinping in South Korea this month. That meeting has helped keep markets steady during recent tensions.

He Yongqian, who speaks for China’s commerce ministry, addressed reporters at a briefing. “The U.S.’ interpretation seriously distorts and exaggerates China’s (rare earths export control) measures, deliberately stirring up unnecessary misunderstanding and panic,” she said.

He added that export license requests meeting proper standards and meant for civilian purposes would get approval, as mentioned in a Reuters report.

The broadened rare earth export rules from Beijing left trade officials and experts worldwide questioning whether China plans to make manufacturers everywhere apply for licenses to ship any product containing even small amounts of Chinese rare earths to end users. He told journalists this interpretation was wrong.

US officials call restrictions a ‘power grab’

Jamieson Greer, the U.S. Trade Representative, labeled China’s new rules “a global supply-chain power grab” on Wednesday. He said he expected Beijing not to put them into effect. Bessent hinted that another extension of the current 90-day tariff pause might happen. That pause is due to end around November 9.

Trade relations between the two nations had looked fairly steady after a September 19 phone conversation between Trump and Xi. That call happened following a Madrid meeting seen as successful because of a major TikTok agreement reached there.

Beijing says the sudden increase in harsh words stems from the U.S. Commerce Department’s unexpected expansion of its “Entity List” in late September. That expansion targeted companies in China and other countries using subsidiaries to get around export restrictions on chipmaking tools and other advanced technology products.

Washington points to China’s critical minerals action as the starting point, which Trump called “shocking.”

Chinese officials maintain they informed Washington before announcing the new licensing system and that the controls match measures already used by other major economies.

“The United States has long overstated national security concerns and abused controls, adopting discriminatory practices against China,” stated one of seven graphics the official People’s Daily published. The graphic noted Washington keeps a control list covering 3,000 items compared to the 900 on Beijing’s list.

“Implementing such export controls is consistent with international practice,” the first graphic said, repeating Beijing’s position since announcing the measures.

Washington has maintained similar rules since the 1950s and has used them lately to prevent foreign semiconductor companies from selling chips to China if American technology was used to make them.

Bessent’s personal attacks on Chinese official

Moving beyond policy matters, Bessent on Wednesday called China’s chief trade negotiator Li Chenggang “slightly unhinged” and “disrespectful.”

He claimed Li threatened to “unleash chaos on the global system” if America proceeded with port fee increases and that Li invited himself to Washington for discussions in August.

The Treasury chief noted that trust between Trump and Xi had stopped tensions from growing worse and kept both leaders planning to meet in Korea. This maintains a way forward for the superpowers to reach an agreement despite clear disagreements between their main negotiators.

The growing dispute comes as both nations struggle with escalating trade tensions that have disrupted global supply chains and rattled markets in recent months.

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