US Treasury Secretary Bessent Warns China on Rare Earth Tariffs

Introduction

US Treasury Secretary Scott Bessent issued a stern warning on November 2, 2025, indicating that the Trump administration is ready to impose higher tariffs on China should Beijing fail to uphold its commitments regarding rare earth exports. This statement comes shortly after a high-stakes agreement between President Donald Trump and Chinese President Xi Jinping aimed at de-escalating trade tensions.

The Recent Accord and China's Commitments

The warning from Secretary Bessent follows a significant trade and economic framework reached on October 30, 2025, between President Donald Trump and Chinese President Xi Jinping in Busan, South Korea. As part of this agreement, China committed to suspending its expanded rare earth export controls, which were initially announced in October 2024 and further tightened in April and October 2025. Beijing agreed to issue general licenses for the export of critical minerals including rare earths, gallium, germanium, antimony, and graphite, effectively removing previous controls. In return, the U.S. agreed to reduce certain tariffs on Chinese goods, particularly those related to fentanyl precursors, and extend some Section 301 tariff exclusions. China also pledged to resume substantial purchases of U.S. soybeans.

Bessent's Concerns and US Strategy

Despite the recent agreement, Secretary Bessent, who was sworn in as the 79th U.S. Treasury Secretary on January 28, 2025, voiced skepticism about China's long-term reliability. In interviews, Bessent stated, 'The Chinese have cornered the market (on rare earths), and unfortunately, at times they proved to be unreliable partners.' He highlighted China's near-monopoly on the processing of these essential metals, which are crucial for various industries, including defense, electronics, and electric vehicles. Bessent emphasized that while the U.S. does not seek to 'decouple' from China, it must 'de-risk' its supply chains to reduce strategic vulnerabilities. He also criticized previous U.S. administrations for being 'asleep at the switch' regarding China's rare earth strategy.

The Importance of Rare Earths

Rare earth elements are a group of 17 metallic elements vital for modern technologies. They are used in a wide array of products, from smartphones and electric vehicles to advanced military equipment and renewable energy technologies. China's dominant position in the global rare earth supply chain, controlling approximately 90% of the world's rare earth minerals and processing capabilities, gives it significant leverage in international trade and geopolitical discussions. The recent accord is seen by some analysts as a temporary reprieve, buying time for the U.S. to develop alternative sources and processing capabilities to lessen its dependence on China.

Conclusion

The Trump administration's threat underscores ongoing tensions in the critical minerals sector, even as a temporary truce has been established. Secretary Bessent's remarks signal that the U.S. remains vigilant and prepared to use economic measures if China deviates from the agreed-upon terms regarding rare earth exports, reflecting a broader strategy to secure critical supply chains.