'China is in middle of Recession, and they are ...', says US Treasury Secretary Scott Bessent; accuses China of controls on resources vital for technology

US Treasury Secretary Scott Bessent has accused China of attempting to undermine the global economy by imposing export controls on critical rare earth minerals and resources essential for technology and defense.

In an interview with the Financial Times, Bessent described Beijing’s actions as an effort “to pull everyone else down with them,” warning that China’s strategy could backfire. The accusations come as tensions escalate ahead of a planned meeting between the US President Donald Trump and Chinese President Xi Jinping.Late last week in a post on Truth Social, President Donald Trump said that the United States would impose new tariffs of 100% on imports from China starting November 1.

He added that the US, on that same date, would also impose export controls on “any and all critical software.” The US President’s announcement came hours after he threatened to slap “a massive increase” of tariffs on Chinese imports in retaliation for new controls that China imposed on exports of rare earths minerals.

Bessent says China is in the middle of a recession/depression

Bessent suggested China’s export controls stem from its own economic struggles, stating, “They are in the middle of a recession/depression, and they are trying to export their way out of it.”

He warned that such actions could further damage China’s global standing.The dispute over rare earths, crucial for both technology and defense industries, underscores growing US-China tensions, with potential ripple effects on the global economy as markets brace for further developments.“If they want to slow down the global economy, they will be hurt the most,” he said. On October 9, Beijing announced that it would ban the export of rare earth materials for military applications, marking the first time such restrictions have explicitly targeted defense uses.

Rare earth magnets are vital for advanced US weapons systems, including the F-35 fighter jet, Tomahawk missiles, and smart bombs. On the same day, China also added Canada-based semiconductor research firm TechInsights to its “unreliable entity list” for its reports on Huawei’s chip development.

Last month, China’s antitrust regulator accused Nvidia of breaching anti-monopoly laws related to a 2020 acquisition. In response, President Trump imposed 100% tariffs on Chinese goods, effective November 1, and threatened to cancel the upcoming summit with Xi. The escalating trade dispute has rattled financial markets, with Wall Street stock averages plummeting at the start of trading on Tuesday.