US Treasury chief to speak with China counterpart as tensions flare

US Treasury Secretary Scott Bessent is set to speak Friday with Chinese Vice Premier He Lifeng, an official from President Donald Trump's administration told AFP -- as Washington works to rally allies to respond to Beijing's rare earth curbs.

The high-level economic talks come as trade tensions flare between the world's two biggest economies following Beijing's announcement of tighter export controls on the critical rare earths industry.

This sparked a fiery response from Trump, who threatened to impose an additional 100-percent tariff on imports from China and to cancel expected talks with his Chinese counterpart Xi Jinping in South Korea.

But Trump said in an excerpt of an interview with Fox News, released Friday, that he would meet Xi after all at the Asia-Pacific Economic Cooperation (APEC) summit.

A senior Trump administration official told AFP that Bessent would speak to He by phone on Friday about ongoing trade negotiations between Washington and Beijing, ahead of the APEC gathering.

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The official did not provide further details.

Bessent has accused China of seeking to hurt the world economy after Beijing announced its new export controls.

Coordinated response

For now, Group of Seven finance ministers have agreed to coordinate their short-term response to China's export controls, and diversify suppliers, the EU's economy commissioner Valdis Dombrovskis told reporters in Washington.

Speaking after G7 leaders met this week, Dombrovskis noted the vast majority of rare earth supplies come from China, meaning that diversification would take years.

"We agreed, both bilaterally with the US and at the G7 level, to coordinate our approach," he said on the sidelines of the International Monetary Fund and World Bank’s fall meetings.

He added that countries would also exchange information on their contacts with Chinese counterparts as they work out short-term solutions.

German Finance Minister Lars Klingbeil told journalists he hopes Trump and Xi's meeting can help to resolve much of the US-China trade conflict.

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"We have made it clear within the G7 that we do not agree with China's approach," he added, referring to the group of Britain, Canada, France, Germany, Italy, Japan and the United States.

Trade tensions between the United States and China have reignited this year as Trump slapped sweeping tariffs on US imports and both countries engaged in tit-for-tat retaliation.

At one point, tariffs on both sides escalated to triple-digit levels, effectively halting some trade as businesses waited for a resolution.

The two countries have since lowered their respective tariff levels but their truce remains shaky.

Source: AFP