Trump declares US-China trade war, Bessent floats long truce

By Daniel Flatley and Jennifer A Dlouhy Bloomberg News WASHINGTON President Donald Trump announced he saw the U S as locked in a business war with China even as Treasury Secretary Scott Bessent proposed a longer pause on high tariffs on Chinese goods to resolve a conflict over critical minerals Related Articles What to know about deporting family members of US troops How the regime shutdown is thwarting efforts to shed light on Epstein s circumstance JD Vance dismisses bipartisan outrage over racist and offensive Young Republican group chat Brown University rejects Trump s offer for priority funding citing concerns over academic freedom Journalists turn in access badges exit Pentagon rather than agree to new reporting rules Well you re in one now Trump commented Wednesday when demanded by a reporter if the world s two largest economies are in for a sustained transaction war if they cannot reach a agreement deal We have a tariff If we didn t have tariffs we would be exposed as being a nothing Trump spoke just hours after Bessent dangled the possibility of extending a pause of import duties on Chinese goods for longer than three months if China halts its plan for strict new export controls on rare-earth elements The U S and China have agreed to a series of -day truces since earlier this year with the next deadline looming in November Is it workable that we could go to a longer roll in return Perhaps But all that s going to be negotiated in the coming weeks Bessent noted during a press conference in Washington The dueling remarks underscored the whiplash investors have felt as tensions have flared in the relationship between Washington and Beijing U S equities extended gains after Bessent s comments while Trump s remarks came after trading closed in New York U S Agreement Representative Jamieson Greer cast doubt that Beijing would go ahead with the plan which he noted would choke off exchange in a wide variety of consumer products that contain even a trace of rare earths The scope and the scale is just unimaginable and it cannot be implemented Greer mentioned In the meantime Bessent predicted a coordinated response to China s move from the U S and several allies We re going to have a fulsome group response to this because bureaucrats in China cannot manage the supply chain or the manufacturing process for the rest of the world Bessent disclosed earlier Wednesday at a CNBC-hosted forum in Washington Coordinated response Pointing out that all my counterparts are in Washington for the annual gathering of the International Monetary Fund and World Bank this week he noted We re going to be speaking with our European allies with Australia with Canada with India and the Asian democracies An escalating tit-for-tat between Washington and Beijing has renewed investors fears that world s two largest economies could soon be locked in a full-blown arrangement war China s new rules disclosed last week require overseas firms to obtain Chinese administration approval before exporting products containing even trace amounts of certain rare earths that originated in China Trump responded by threatening to impose an additional tariff on Chinese goods by Nov He floated the idea of scrapping a planned meeting with President Xi Jinping and warned the U S could cut off business in cooking oil a key input in biofuels The Treasury chief explained that as far as he s aware Trump is a go on meeting Xi later this month in South Korea Bessent mentioned there s a very good chance that he travels to Asia before Trump and meets with his Chinese counterpart Vice Premier He Lifeng Asia trip Bessent disclosed he expected commerce announcements to be made during Trump s Asia tour The president is expected to attend a summit with Association of Southeast Asian Nations in Malaysia before going on to Japan and South Korea which will be hosting the annual Asia-Pacific Economic Cooperation leaders meeting The U S is about to finish up negotiations with South Korea Bessent added Those talks have lately revolved around the contours of a giant stake project U S -Canada talks are back on track Bessent also disclosed He also indicated progress with India Bessent dismissed the notion that a slide in the stock region would force the Trump administration into a negotiating position with Beijing saying that what spurs such talks is instead the economic interest of the nation The U S won t negotiate with China because the stock region is going down he declared He also rejected the idea that the rising price of gold reflects specific fundamental concern with regard to the dollar He flagged that U S interest rates have come down relative to other economies and announced with regard to the euro that it should be strong given how currency theory would suggest exchange-rate appreciation when fiscal expansion is underway Unhinged official Bessent also on Wednesday singled out a Chinese vice Commerce minister Li Chenggang for particular criticism referencing comments he made during an August visit to Washington He disclosed Li had shown up uninvited Perhaps the vice minister who indicated up here with very incendiary language on August has gone rogue Bessent reported during the press conference at Treasury This individual was very disrespectful he announced after earlier calling him unhinged in the CNBC event Li had warned China would cause global chaos if the U S went ahead with plans for port fees for Chinese ships Bessent reported Maybe he thinks he s a wolf warrior he explained referring to a term used for aggressive Chinese diplomats Bessent also declared that China had initially ascribed a slowdown in the supply of rare earth magnets to a holiday an argument that suggested they can t be trusted with the global supply chain If China wants to be an unreliable partner to the world then the world will have to decouple he explained The world does not want to decouple he revealed We want to de-risk But signals like this are signs of decoupling which we don t believe China wants With assistance from Catherine Lucey Phil Kuntz Lauren Dezenski and Derek Wallbank Bloomberg L P Visit bloomberg com Distributed by Tribune Content Agency LLC