U.S. Holds Firm on China Trade Policy Despite Market Volatility, Says Treasury Chief Bessent (2025)

• Why the U.S. Won't Budge on China Policy Despite Market Chaos
• The Rare Earth Standoff: Carrots and Sticks
• Global Allies Circle Wagons Against China's Trade Tactics
• Trump-Xi Meeting Still On Despite Rhetoric
• Market Reactions and Policy Realities
• What Comes Next in the U.S.-China Trade Saga?
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In a defiant stance that sent shockwaves through global markets, U.S. Treasury Secretary Anthony Bessent declared America won't let stock market swings dictate trade policy with China. Speaking at a major financial forum, Bessent dismissed suggestions that market turbulence could force negotiations, while revealing potential tariff relief if China backs down on rare earth restrictions. The comments come as both nations prepare for high-stakes November tariff deadlines and a possible presidential summit in South Korea.

Why the U.S. Won't Budge on China Policy Despite Market Chaos

When the Dow plunged 800 points last Friday after Trump's latest tariff threat, many Wall Street analysts assumed Washington WOULD soften its stance. Not so, according to Treasury Secretary Bessent. "We don't make trade decisions based on the S&P 500's daily movements," he told attendees at the Invest in America Forum. "What matters is what makes long-term economic sense for American workers and businesses." This hardline position directly counters Chinese leadership's apparent belief that sustained market pressure could break U.S. resolve.

The Rare Earth Standoff: Carrots and Sticks

At the heart of current tensions lies China's proposed restrictions on rare earth mineral exports - critical components for everything from smartphones to fighter jets. The TRUMP administration is pursuing a dual strategy: offering extended tariff suspensions if China drops the measures while threatening severe retaliation if implemented. "We're looking at potentially longer tariff pauses," Bessent revealed, noting the current 90-day suspension framework could be extended. The next deadline looms in November, creating urgency for both sides.

Global Allies Circle Wagons Against China's Trade Tactics

Bessent emphasized the U.S. isn't going it alone. With global finance ministers gathering for IMF/World Bank meetings, he's coordinating responses with European, Australian, Canadian and Asian partners. "This isn't just America's fight," he stated, suggesting a united front could emerge against what he called China's "economic coercion." The Treasury chief specifically criticized a Wall Street Journal report suggesting Chinese leaders view market turmoil as leverage, calling it "CCP dictation" rather than journalism.

Trump-Xi Meeting Still On Despite Rhetoric

While President Trump recently downplayed the need for talks with Xi Jinping, Bessent confirmed plans remain for a potential November meeting during the APEC summit in South Korea. The Treasury Secretary himself may travel ahead to meet Chinese Vice Premier He Lifeng, calling the odds "very good." Observers speculate any breakthrough would likely center on the rare earth dispute, with Trump potentially offering extended tariff relief in exchange for China maintaining mineral exports.

Market Reactions and Policy Realities

Bessent's comments highlight the administration's nuanced view of markets - appreciating their strength but refusing to be held hostage by volatility. "The President sees a strong market as the result of good policies, not the other way around," he noted, citing AI investment growth as one policy-driven success. This philosophy explains why recent market swings haven't softened the U.S. position, even as investors fear escalating trade wars.

What Comes Next in the U.S.-China Trade Saga?

With November deadlines approaching, all eyes turn to the APEC summit where Trump and Xi might meet. The rare earth issue remains the immediate flashpoint, but broader tensions over technology transfers and intellectual property persist. As Bessent put it: "We're playing the long game here." For traders, that means buckling up for more volatility; for policymakers, it signals no quick resolution unless China blinks first on key issues.

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Will the U.S. really ignore stock market drops in its China policy?

According to Treasury Secretary Bessent, absolutely. The administration views market reactions as short-term noise compared to long-term economic strategy. While Trump appreciates strong markets, he won't let daily swings dictate trade decisions affecting decades of U.S. competitiveness.

What's the significance of the rare earth minerals dispute?

Rare earth elements are essential for modern technology and defense systems. China controls about 80% of global supply, giving it potential leverage. The U.S. sees restrictions as economic warfare and is mobilizing allies to counter what it considers unfair tactics.

How likely is a Trump-Xi meeting in November?

Despite mixed signals, Bessent confirmed plans remain for a potential meeting during the APEC summit. The Treasury Secretary's own planned trip to Asia suggests serious preparations are underway for high-level discussions.