A Trump administration official Wednesday revealed the "unhinged" tariff threat China trade negotiators made, saying they would "unleash chaos."
U.S. Treasury Secretary Scott Bessent referred to talks with a Beijing trade official that briefly stopped the rising tariffs between the U.S. and China — but that changed last week when China announced it would add export controls on rare earth metals — and the Trump administration argued that violated earlier trade agreements, Newsweek reports.
"There was a lower-level trade person who was slightly unhinged here in August," Bessent told CNBC in an appearance Wednesday in Washington, D.C. at the "Invest in America" event.
The negotiator was "threatening...that China would unleash chaos on the global system if the U.S. went ahead with our docking fees for Chinese ships," Bessent said.
"This is clearly something that they were planning all along," Bessent said, describing the response to the new export controls on rare earths. "I think that things can de-escalate, that we don't want to have to escalate."
"We have things that are more powerful than the rare earth export controls that the Chinese want to put on. And to be clear, this is China versus the world. It's not a U.S.-China problem."
Trump last week vowed to add a 100% tariff on Chinese exports. This prompted global markets to plummet in the wake of the ongoing trade war and new tariffs.
In a Truth Social post Tuesday, Trump said China was "purposefully not buying our Soybeans, and causing difficulty for our Soybean Farmers" and referred to the move as an "Economically Hostile Act."
The president is still expected to meet with Chinese President Xi Jinping. It's unclear when and where that meeting will take place.
"As far as I know, President Trump is still a go on that," Bessent said.
"But I think they have an excellent relationship. And the reason this didn't really escalate is the level of trust between the two leaders. So, you know, that's an enduring part of U.S.-China. And everything else stems from that."