Plans for US President Donald Trump to meet Chinese President Xi Jinping in South Korea later this month remain on track despite escalating trade tensions, according to US Treasury Secretary Scott Bessent.

Speaking to Fox Business Network on Monday, Bessent said the two sides had “substantially de-escalated” following a week of heated rhetoric and retaliatory moves that threatened to spark a new trade war between the world’s two largest economies.

“The relationship, despite this announcement last week, is good. Lines of communication have reopened, so we’ll see where it goes,” Bessent said.
“The 100 percent tariff does not have to happen if we can work through these issues in negotiations.”

Bessent added that Trump’s planned meeting with Xi at the Asia-Pacific Economic Cooperation (APEC) forum in late October “will still be on,” despite uncertainty after Washington’s tariff threat and Beijing’s new export restrictions on rare earth minerals.

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Trade tensions flare

Tensions reignited last week after China announced tighter export controls on key rare earth elements — materials vital to the production of electronics, semiconductors, and military hardware.

In response, Trump unveiled plans for a 100 percent tariff on all Chinese goods, set to take effect on November 1, unless Beijing reverses its policy.

The announcement rattled global markets, sending stocks tumbling on Friday. But Trump struck a more conciliatory tone on Sunday, posting 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!!!”

The comments helped calm Wall Street, triggering a rebound in US equities when markets opened on Monday.

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‘They pointed a bazooka’

Despite the softer tone, Bessent criticised China’s export restrictions, calling them a direct threat to global supply chains.

“They have pointed a bazooka at the supply chains and the industrial base of the entire free world,” he said. “We’re not going to have it. China is a command-and-control economy — they are neither going to command nor control us.”

The Treasury chief said the US has been coordinating with European, Indian, and Asian allies to respond to China’s move.

Beijing, for its part, defended its decision. The Chinese Ministry of Commerce said the new rules were enacted in response to recent US actions — including the blacklisting of Chinese companies and new port fees on vessels linked to China — following trade talks in Madrid last month.

The ministry accused Washington of “provocative and damaging” behaviour and denounced Trump’s tariff threat as “a typical example of double standards.”

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Strategic stakes

China dominates the global rare earths market, producing nearly 70 percent of the world’s supply. These minerals are critical for manufacturing electric vehicles, smartphones, advanced semiconductors, and weapons systems — all sectors in which the United States is heavily reliant on imports.

The Treasury Department has indicated that negotiations are ongoing and that both sides are seeking ways to avoid escalation before the Trump–Xi meeting.

Bessent, seeking to reassure investors, noted that the White House remains committed to engagement.

“He [Trump] will be meeting with Party Chair Xi in Korea,” Bessent said. “They have a very good relationship.”