US Treasury Secretary Asserts Beijing’s Export Controls Were Meant to Destabilise Global Markets

Washington — In a striking escalation of rhetoric, U.S. Treasury Secretary Scott Bessent publicly accused China of attempting to inflict damage on the global economy by imposing export controls on rare earths and critical minerals. The allegations, first reported in the Financial Times’ FirstFT newsletter, signal a deepening divide in U.S.-China economic relations just weeks ahead of a planned summit between President Donald Trump and Chinese President Xi Jinping.

Bessent framed the export curbs as a symptom of China’s internal economic distress. “This is a sign of how weak their economy is,” he told the FT. He added that China might be attempting to “pull everybody else down with them” by weaponising its role as a critical supplier to global supply chains.

“They are in the middle of a recession/depression, and they are trying to export their way out of it,” Bessent said. He warned that not only would such actions undermine global growth, but that Beijing itself would ultimately bear the brunt of retaliation, since it remains one of the world’s largest exporters.

The accusations come after Beijing’s decision to broaden export licensing requirements on key minerals used in high-tech, clean energy, and defense supply chains. The move drew immediate concern from U.S. officials, who viewed the timing—mere weeks before a potential Trump-Xi meeting—as advertent.

In a related development, China recently added five U.S. subsidiaries of South Korean shipbuilder Hanwha Ocean to its sanctions list, triggering negative reactions across global markets.

Strategic Implications and Market Repercussions

Analysts say Bessent’s comments were calibrated to cast China’s export controls not as defensive or regulatory, but as strategic aggression. That framing bolsters U.S. leverage in trade diplomacy and puts pressure on Beijing in the run-up to any summit.

Financial markets responded with heightened volatility. The S&P 500 posted one of its sharpest single-day drops in months after Trump threatened a 100% tariff on Chinese imports. Safe-haven assets including gold and silver drew investor inflows.

Observers note that China controls a dominant share of the world’s rare earth mining and processing capacity. Its ability to restrict export supply gives it leverage—but also exposes it to backlash if it overplays its hand.

Diplomatic Path Ahead

Despite the heat, Bessent affirmed that Trump’s meeting with Xi is still scheduled to proceed in South Korea later this month. Officials from both sides have reopened communication channels.

But tensions persist. U.S. negotiators are already consulting allied governments—including European nations and India—to coordinate pressure on China. Washington has signalled it will aggressively reject China’s licensing demands, particularly in high-tech and defense supply chains.

Whether the summit results in de-escalation or further confrontation may hinge on who yields first: Beijing in rolling back its export curbs or Washington in moderating retaliatory measures. The global economy may be caught in the middle.