China on Thursday accused the U.S. of stoking panic over its rare earth controls and said Treasury Secretary Scott Bessent had made "grossly distorted" remarks about a top Chinese trade negotiator, rejecting a White House call to roll back the curbs.

The official newspaper of the governing Communist Party also issued a seven-point rebuttal after top U.S. negotiators suggested Beijing could avert President Donald Trump's threat to impose 100% tariffs on Chinese goods by scrapping the measures set to take effect on November 8.

While investors are relieved the world's top two economies have avoided the retaliatory tariff hikes of March and April, each exchange risks derailing a meeting between Trump and Chinese leader Xi Jinping in South Korea later this month -- a fixed point that has so far helped anchor market stability.

"The U.S.' interpretation seriously distorts and exaggerates China's (rare earths export control) measures, deliberately stirring up unnecessary misunderstanding and panic, He Yongqian, a commerce ministry spokesperson, told a news conference.

"Provided the export licence applications are compliant and intended for civilian use, they will be approved," she added.

Beijing's expanded rare earths export controls left trade negotiators and analysts the world over wondering whether China intends to require manufacturers of any product anywhere in the world containing even trace amounts of Chinese rare earths to apply for a licence to ship it to its final destination.

He Yongqian told reporters that was not the case.U.S. Trade Representative Jamieson Greer on Wednesday called China's new measures "a global supply-chain power grab," and said that he expected Beijing not to implement them, while Bessent suggested another extension to the current 90-day tariff truce - which is set to expire around November 9 - could be possible.

U.S.-China trade relations had appeared relatively stable following a September 19 call between Trump and Xi, which came after a Madrid summit widely viewed as a success thanks to its breakthrough TikTok deal.

Source: Investing.com