Scott Bessent Expects US-China Rare Earths Deal By Thanksgiving Based On Xi Jinping's 'Word' But Issues Caution: 'All Options...'

Treasury Secretary Scott Bessent expressed optimism about the ongoing rare earths deal between the U.S. and China, hinting at a potential resolution by Thanksgiving.

Bessent Optimistic On China’s ‘Word’

Bessent revealed that the rare earths deal between the U.S. and China is on track to be completed by Thanksgiving. In an interview with Fox News’ “Sunday Morning Futures, he expressed confidence in China’s commitment to honoring the agreements made during the leaders’ meeting in Korea.

 “We haven’t even finished the agreement, which we hope to have done by Thanksgiving,” said Bessent.

Addressing concerns raised by a Wall Street Journal report about China’s intention to limit rare earths access for U.S. military-affiliated companies, Bessent dismissed the claims. 

 When asked about the potential consequences if China fails to honor the deal, Bessent assured that the U.S. has various options but is approaching the situation with optimism.

“All options are on the table, but I think we have to go into this believing that President Xi will keep his word to President Trump,” the Treasury Secretary said.

US Ramps Up Rare Earth Game

This news comes in the wake of a broader trade agreement between the U.S. and China, with China agreeing to lift its rare earth mineral export restrictions. This decision was announced by the White House as part of the trade truce reached between President Donald Trump and Chinese President Xi Jinping.

Additionally, the Trump administration and private investors have invested $1.4 billion into two US startups to counter China’s dominance in the rare-earth magnet sector. This investment aims to establish a fully domestic rare earth magnet supply chain, further indicating the US’s strategic focus on reducing its reliance on Chinese rare earths.

Bessent’s Stance On China’s ‘Difficult’ Economy

In August, Bessent argued that China now runs the most imbalanced economy in modern history, with state-driven overinvestment in manufacturing leading many firms to produce below cost, effectively functioning as a government-backed jobs program. He called the economy “difficult to deal with."

He said China's non-market structure and its role as both the top economic and military rival make it uniquely difficult for other countries to engage with. Bessent also warned that China's growing production capacity poses rising risks for the global economy.

Notably, in the Sunday interview, Bessent echoed Vice President JD Vance, who had said in August that the U.S. has significant leverage in its trade standoff with China and expressed confidence that Beijing will ultimately take a "reasonable" path. He added that both he and the president hope that this leverage won't need to be used.

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.