The U.S. has drafted countermeasures if negotiations fail with China.

U.S. Trade Representative Jamieson Greer warned that China’s new export restrictions could breach a trade agreement reached earlier this year, while Treasury Secretary Scott Bessent accused Beijing of acting in bad faith, saying “they can’t be trusted.” The comments mark a sharp escalation in the ongoing U.S.–China trade conflict, as the Trump administration signals that higher import tariffs may be imminent unless tensions ease.

Speaking at the Treasury Department, Greer said the new Chinese rules would effectively give Beijing control over “the entire global supply chain.” He acknowledged that some analysts see the move as a negotiating tactic, but argued it is part of a broader strategy to dominate the world’s production networks. Holding up a copy of the so-called “Geneva Agreement,” Greer noted that the United States had agreed to reduce tariffs in exchange for access to China’s rare earth minerals, but that China has since expanded its export curbs.

The dispute comes after President Trump threatened to impose 100% tariffs on Chinese goods if Beijing proceeds with its plan to restrict exports of key minerals essential to industries such as defense, autos, and artificial intelligence. China, which holds the dominant share of the world’s rare earth mining and processing capacity, said the controls could take effect as soon as November 1.

Bessent told reporters that U.S. companies, including automakers, have already reported a noticeable slowdown in the delivery of magnets and other rare earth components. “We asked the Chinese about this, and they said it was because of a holiday,” Bessent said. “They can’t be trusted.” He added that President Trump still intends to meet with Chinese President Xi Jinping later this month in South Korea and expressed cautious optimism that the situation could be defused.