by Carlos Martinez
There is only one side responsible for sabotaging U.S.-China trade relations, and it’s not the Chinese. U.S. Treasury Secretary Scott Bessent has accused China of trying to damage the U.S. economy after Beijing announced regulations on the export of rare earths and critical minerals. He claimed Beijing’s move “is a sign of how weak their economy is,” asserting that “they are in the middle of a recession and they are trying to export their way out of it.”
Mr. Bessent apparently lives on another planet, which indicates that at least the U.S.’s space program is going well. For one thing, China’s economy is growing at a rate of 5% per year, wages are rising rapidly, everyone is securely housed, living standards are continuously improving, and the infrastructure is light-years ahead of the U.S. (as I write this, I’m travelling at 300 km/h [186 mph] on a train between Shanghai and Nanjing).
Funny sort of recession. There’s a more credible explanation of China’s rare earth controls: In the last three weeks, the U.S. has rolled out 20 discriminatory trade measures in an attempt to undermine China’s negotiating position at the next round of trade talks. In late September, the U.S. added thousands of Chinese companies to its exports control entity list, and shortly after, implemented port fee investigation measures on Chinese-linked vessels, while simultaneously threatening new 100% tariffs.
Trump and his team expect to punish China and suffer no consequences, but China is sufficiently strong, and sufficiently dignified, not to have to play these ‘art of the deal’ games. Meanwhile, it should be reiterated that China’s export controls are not an export ban. They are aimed at upholding international nonproliferation obligations and defending peace. Bad news for the military-industrial complex but good news for everyone else.
There’s a very simple path forward, Mr. Trump and Mr. Bessent: Treat China as an equal, stop trying to bully your way towards a one-sided deal, and reach an agreement that helps both sides.