Ag Policy Blog

The Trump administration's A-team on China and trade had sharp words over the state of play between the two countries as they blasted China's new export controls on rare earth minerals, called for de-risking supply chains, but also insisted the two countries need to trade as well.

Soybeans and agriculture did not come up Wednesday when Treasury Secretary Scott Bessent and U.S. Trade Representative Jamieson Greer held a press conference in Washington about the ongoing trade disputes with China, but the event demonstrated a high level of frustration within the Trump administration over China's latest actions.

Bessent and Greer held an unusual press conference where they appeared to play a version of good cop, bad cop when it comes to negotiations with China over rare earth minerals. China came out last week announcing export curbs on the minerals, which are used in a wide range of high-tech and energy products from smart phones to electric batteries

"To be clear, this is not just about the United States," Greer said. "These actions, if implemented, would apply to the entire world. China's announcement is nothing more than a global supply chain power grab."

Greer added that China's last counter move in this trade battle "is not proportional retaliation" but "an exercise of economic coercion on every country of the world."

Bessent suggested China has become an "unreliable partner, but added, "As the president said, we want to help China not hurt it. If some in the Chinese government want to slow down the global economy through disappointing actions and through economic coercion, the Chinese economy will be hurt the most. And make no mistake, this is China versus the world. They have put these unacceptable export controls on the entire world."

In an interview earlier Wednesday with CNBC, Bessent said China dominates rare earth minerals, controlling 70% of mining, along with as much as 95% of the processing and refining of those minerals. He also said anytime another competitor develops, China cuts prices to put them out of the business.

To counter that, Bessent said the U.S. government will take an equity stake in investments to set pricing floors and forward buying "across a range of industries" to affect how China sells rare earth minerals. "We're going to need a strategic mineral reserve," Bessent said on CNBC.

Bessent implied that one Chinese vice minister has been disruptive and "very disrespectful" in trade talks despite both sides trying to negotiate. That vice minister had suggested China would cause "global chaos" if the port shipping fees were implemented.

As DTN has reported, those port fees went into effect on Tuesday, sparking China to retaliate against U.S. vessels as well.

President Trump, on social media, has vacillated about China over the past week -- threatening 100% tariffs starting in November, saying he would no longer meet with Chinese President Xi Jinping, backing down, then calling for a ban on Chinese cooking oil because of the lack of U.S. soybean purchases.

As Dow Jones reported, grain traders focused on soybeans are essentially left watching Trump's Truth Social account to gauge how the soybean market should swing.

Bessent, when asked, said he had talked with Trump on Tuesday night. "He is still expecting to see Party Chair Xi in Korea."

The trade war began with China over the trade imbalance and intellectual property protections, but those conversations have largely been put on the backburner as China has raised the stakes with rare earth minerals. Greer said there is room for a positive relationship with China, but acknowledged the rare earth talks have dominated everything else right now.

"The reality is there are a lot of areas where we can trade with the Chinese. Our trade is wildly imbalanced so it needs to be more balanced," Greer said. He added, "Instead, we're constantly focused on the Chinese chokehold on the world of rare earths and rare earth materials."

The Treasury secretary also criticized China for buying Russian oil and "fueling the Russian war machine" as well.

Bessent added that while trade is needed with China, he also suggested the need for U.S. businesses to find other trading partners, though he said the U.S. and world do not want to "decouple" from China. "We should work to derisk and diversify our supply chains away from China as quickly as possible."

Bessent pointed to "substantial communication with the Chinese" in the past few days and said he believed there would be a lot more discussions continuing as well.

Bessent then said he hoped China would follow through on efforts to "de-escalate tensions," adding "While there is substantial action we could take, we'd rather not. I believe China is open to discussion and I'm optimistic this can be de-escalated."

Also see, "US Soybean Farmers Are Dangerously Overdependent on China," https://www.dtnpf.com/…

Chris Clayton can be reached at Chris.Clayton@dtn.com

Follow him on social platform X @ChrisClaytonDTN

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