U.S. Trade Representative Jamieson Greer said he and Treasury Secretary Scott Bessent will head to Malaysia on Wednesday to meet with Chinese officials regarding what he called "very aggressive" and "disproportionate" measures Beijing has taken to curb rare earth mineral exports.

Greer told CNBC's "Squawk Box" that a meeting between President Donald Trump and Chinese President Xi Jinping is still scheduled, but it would be a mutual decision if the meeting takes place on the sidelines of an economic conference in South Korea next week.

Trump is scheduled to travel to Kuala Lumpur for the Association of Southeast Asian Nations meeting, which begins Sunday, and later that week will attend the Asia-Pacific Economic Cooperation forum leaders' summit in Seoul from October 31 to November 1.

US trade negotiators said China's moves violated commitments its officials made months ago to continue supplying rare earth metals needed for high-tech, but said there was still a "good landing zone" for the US and China to trade on a more balanced basis.

Trade tensions between the US and China, the world's two largest economies, have escalated in recent weeks after months of relative calm. Trump imposed additional 100% tariffs on China, effective November 1, after China announced export controls on nearly all rare earth metals.

Greer and Bessent have since emphasized that they don't want to decouple from China or escalate the situation, but insisted that the United States needs to rebalance trade with China after decades of severely limited access to the Chinese market.

Trump reiterated on Tuesday that any deal with China must be fair and suggested the meeting with Xi could still be canceled. "It probably won't happen," he said during a White House lunch with Republican senators. "It could happen, for example, that someone might say, 'I don't want to meet, that's too bad.' But it's actually not bad, it's just business."

Greer noted that Trump and Xi have a good relationship and that there is still room for de-escalation. "Conceptually, there's a good landing zone for the United States and China where we trade in a more balanced way, and we trade in non-sensitive goods, and where we have a constructive relationship," Greer told CNBC.

"The U.S. has always been quite open to China, and that's really driven by Chinese policies that exclude U.S. companies and encourage excess capacity and overproduction in China. None of that is in the United States' best interests," he said. "We can't live like that anymore, so we need an alternative path."

Greer said Trump and other U.S. officials will also discuss agricultural issues, including China's move to halt purchases of U.S. soybeans and sorghum, which he said is intended to deliberately harm U.S. farmers.

"Obviously the president will raise... all of us... raise this with them," he said, noting that China still has outstanding obligations to purchase agricultural and manufactured goods under trade agreements signed during Trump's first term. (alg)

Source: Reuters