CHINA BLINKS: Bessent says Trump’s pressure wins pause on rare earth ban

Right now, let's turn to this exclusive. Joining me right now from South Korea is the Treasury Secretary of this great nation, Scott Besant. Mr. Secretary, thank you so much for joining us this morning.

Maria, good evening from South Korea.

Congratulations to you and your team on what we're hearing out of the China deal. Can you walk us through the most important elements of this agreement that President Trump said was very friendly between the United States and China?

Well, Maria, all the congratulations should go to President Trump. He has a fine relationship with President Xi. The mood in the room was one of great respect, but also between two men who knew each other quite well and knew what they were getting into. I think what was very helpful for today's meeting was my counterpart, the vice premier, Huly Fung, and I had had two days of very tough and fulsome negotiations in Kuala Lumpur, Malaysia, earlier in the week.

So President Xi walked in the room and said, I think we can agree on the consensus reached in Malaysia. And so the two leaders were able to discuss more bigger-picture ideas during the conversation, including what the remainder of President Trump's term would look like, because I think the Chinese realize that, with President Trump in office, it is an opportunity to reset the relationship in terms of mutual respect.

President Trump is commanding respect around the world like no other leader. Yeah for sure and we saw that throughout all of his meetings. Now

Secretary many people were worried about the flow of rare earth minerals and I know that you addressed this with your counterpart first and then the president took it on with Xi Jinping. Is this a pause for a year? What is the story in terms of the flow of rare earth minerals?

Yes. So on October 8th, the Chinese surprised the world and put announced it a few weeks a month out. They were going to put

export controls on products with even point zero one percent of rare earth minerals produced or manufactured in China. They were gonna put export controls on those. It was China versus the world. And we were able to negotiate a one-year pause on that in return for some things that the Chinese wanted. President Trump was also able to negotiate with President Xi an agreement to start working

on ending this terrible fentanyl crisis that is affecting the U.S. And what is China's part in that? Their precursor chemicals for fentanyl are shipped from China to Canada to Mexico. They make their way into the U.S. and are killing hundreds of thousands of our citizens

and ruining families and lives for decades to come. So President Trump very wisely in the spring had put a 20 percent fentanyl tariff on China. We agreed to cut that in half and in return they're going to give us substantial cooperation in return for reducing the precursor flow into North America. We're going to set, we're going to have working groups that over the coming weeks will set very objective measures

on whether that's successful or not.

So this pause for a year would be until next October. Secretary, what are you going to do in terms of verifying that? And you know, it really did surprise the world when they put those export controls in place. Do you believe that, in fact, you will be able to get that refined magnets flowing for this year?

And is that enough time for the U.S. to become independent in terms of the need for those rare earth magnets? I know that the president was very smart in terms of doing lots of deals with Asian partners even before sitting down with Xi Jinping, and among those was a deal with Australia for Rare Earth as well.

Right. So Maria, let's work backwards there. The president has been laser-focused since the day he came in office in terms of rare earths. He issued an executive order right out of the box. He recognized that this is a strategic vulnerability for the U.S.

The Chinese control about 70 percent of the mining, but more importantly, they control about 90 percent of the processing and refining. So since January, President Trump, this administration, have been working to stand up facilities where we can refine and process rare earths. I think it is something that we inherited. This was a mess that's 20 years in the making, 20 years in the making, and President Trump is determined to solve this

because we have to take control of our supply chains. And we're gonna be taking control of our supply chains in rare earths, in semiconductors, in medicines, in steel, in shipbuilding. Part of the America First agenda that President Trump is pushing

is for us to be able to control our own destiny and not have any choke points in our supply chains like he inherited.

This is very important. Secretary, really, congratulations on that. In response, is the U.S. suspending that new rule that was put in place that would have expanded the entity list, export restrictions to any entity that is at least 50 percent owned by one or more entities on the list for one year?

Yes, we are going to be suspending that for a year in return for the suspension on the rare earth licensing regime. And Maria, what's important to note here that it was China versus the world. China put or threatened to put this licensing regime on the entire world. And President Trump, as the leader of the free world, negotiated this deal for everyone, because what's important for people to understand is that the Western supply chains, along with the democracies in Asia,

India, Japan, Korea, where I'm standing now, the supply chains are very integrated. So it wouldn't have done any good just to suspend the licenses or the licensing regime for the U.S. It has to be for the whole world. The whole world is united here, and we're all moving forward together. And it was President Trump's leadership that's done this.

Well, it's very interesting to see what was most important to China and what we're giving them in response. And obviously, that entity list export restriction was quite important to them. What about suspending the measures from the Section 301 investigation, Secretary, which of course initially targeted China's maritime, logistics and shipbuilding industries for one year?

Is that also on the table?

That was that was also suspended, Maria. In the meantime, just the the threat of that 301 since the summer, I believe that the Chinese shipbuilders have seen substantial diminution or decreases in their order books. So that's gonna be suspended for a year. And what's important, President Trump agreed last night with the president of Korea on a historic deal that is going to bring shipbuilding back to the US.

And the Koreans are great shipbuilders, the Japan, Japanese are great shipbuilders. So we are going to integrate our shipbuilding with our Western allies. And Maria, this is what leadership looks like. You know, when the U.S. leads, the world follows. And President Trump has been doing that. I've been fortunate enough that over the past nine months, I've seen President Trump in

action. I saw him at the G7 in Canada with the Europeans. I saw him at the United Nations, where he gathered, I would guess, 85% of the Muslim-speaking world in a room that set the stage for the deal in Gaza. And then, two days ago, at the ASEAN conference, we had the leaders in Asia.

And it is the respect for President Trump in all three of these groups that is allowing U.S. leadership to reassert itself, and this is what is going to matter for the U.S. economy, the American people, and the free world. We're all moving forward together with his leadership.

Yes, I noted that many times in the last few days, Secretary, because even before getting to China, the president did that deal with Australia, then got the I'm sorry, before he got to Asia, rather, did the deal with Australia, and then once in Asia did deals with Cambodia and Thailand and, and of course, Japan. The meeting with the new Japanese Prime Minister seems very warm. I want to get your take on that, because there was some reports, even though they—two—there's this iconic photo of them walking down the steps and having a very warm conversation,

but there were reports that she pushed back on the president's request for Japan to stop buying oil from Russia. What can you tell us about that, sir?

So a couple of things, Maria. Again, President Trump came into Asia, into China's backyard, and the Asian countries want to do deals with the U.S. They want to bring their manufacturing to the U.S. They want to trade with the U.S. We made the U.S. They want to bring their manufacturing to the U.S. They want to trade with the U.S. We've made the U.S. the best venue for manufacturing. The president is bringing back precision manufacturing. And in terms of the relationship between President Trump and the

new Japanese prime minister, I think it's going to be a fantastic relationship. As you know, he had a very close relationship with Prime Minister Abe, who was tragically assassinated. The new prime minister is a protege of Prime Minister Abe. I think they had great personal chemistry, but also I think that they are fully aligned in terms of the Chinese, excuse me, in terms of the Japanese buying Russian oil. They buy, I think, a substantial amount of LNG, about 10 percent of their needs from Russia.

And I believe over time they will be weaning off of that and they will be part of a very large pipeline project that the U.S. is constructing in Alaska. The Koreans may be part of it. And President Xi unilaterally in the meeting today brought up that the Chinese might like to be part of it. So it's energy dominance like we haven't seen before in the U.S.

The past four years under the Biden administration, they sought to suppress one in the U.S. The past four years under the Biden administration, they sought to suppress one of the U.S.'s great assets. So not only does it create jobs, it creates strategic safety, and it allows us to exercise one of our great advantages globally, which is supplying energy to the world and taking that away from the Russians.

This is huge news, certainly, and obviously quite important to America, as is the issue around TikTok. Was that part of any agreement, sir? Will China resolve any issues related to TikTok operating in the United States?

The Maria in Kuala Lumpur, we finalized the TikTok agreement in terms of getting Chinese approval, and I would expect that that would go forward in the coming weeks and months, and we'll finally see a resolution to that.

The U.S. and Japan signed a new agreement on nuclear power, as well as Rare Earths. Secretary, the president and the prime minister, Takeishi, called it the start of a new golden age in relations. What can you tell us about President Trump's plans on the nuclear energy part of this?

Maria, President Trump is bringing back nuclear power like we've never seen before. It's clean. It's reliable. The U.S. has an advantage. And again, for years, for some unknown reason, nuclear power was not used in the US and we're bringing it back as fast as we can.

One of the things that we discovered when we got in was the permitting problem and the need for reform in terms of getting the plants off the ground. So President Trump has worked with EPA Commissioner Lee Zeldin, who's doing a fantastic job. He's given him the mandate to move as quickly as possible in terms of permitting. And these things are going to go from what could be dozens of years to a few months or

even a few weeks. So it's all hands on deck for nuclear power. The Chinese are building nuclear plants. They're starting them up every month, and we are behind. But under President Trump's leadership, we're gonna catch up.

Secretary, when are you expecting a signed contract or a signed agreement from the dealings in China?

Maria, we finished it. The Kuala Lumpur agreement was finished in the middle of the night last night. So I expect that we will exchange signatures possibly as soon as next week. And Maria, one of the big, big parts of this agreement, and I'm gonna break the news here on your story, is the massive amount of agriculture purchases

that the Chinese are gonna be doing in this agreement. So the Chinese have agreed to buy 12 million metric tons of soybeans during this season right now between now and the Should be January and then for the next three years

They're going to be buying a minimum a minimum of 25 million metric tons per per annum for the next three years What I would expect is as President Trump did in 2020, after President Xi had agreed to the phase one deal, he called him regularly and got him to buy more, and that number went up much higher. The other thing to realize is in addition to the 12 this year,

the 25 per year, 25 million tons per year for the next three years, we've also signed trade deals with countries in Southeast Asia, the rest of the world to buy our soybeans to the tune of another 19 million metric tons. So, you know, our great soybean farmers, who the Chinese used as political pawns, that's off the table and they should prosper in the years to come. They backed President Trump and they knew that he had their back and this deal is the culmination of that. And it sets in motion great purchase agreements for the next three and a half years.

That is incredible. Congratulations on all of this. Obviously, your efforts and the president's efforts to go all the way to Asia to have these one-on-one meetings is yielding great results. And the president has been talking about $17 trillion in new investments into America on his watch.

That was before we heard what South Korea is doing in terms of investing $350 billion in the U.S. in exchange for lowered tariffs there and Seoul getting the green light to build a nuclear-powered submarine at the Philadelphia shipyards. I mean, it's close to a trillion dollar deal that you're talking about coming from South Korea alone. But Mr. Secretary, you are now going to head back to Washington and you will arrive to a whole different story and a whole different reaction from your colleagues

in Washington as the government shutdown is now entering really almost a month closed, and we are seeing real impact. Newark International Airport had to have a ground stop because TSA agents are calling in sick. They're not showing up. What is your reaction to what's happening with this government shutdown,

and when would you expect some kind of an agreement here to reopen government?

Well, Maria, as you said, the contrast could not be more marked that if President Trump comes out to Asia, and I think at the end of the day, just this trip alone may end up in $2 trillion of investment, then we go home and the Democrats have decided, because of their poll numbers, because I don't even know why, they've decided to keep the government shut. You know, if you look, the vote is 52 Republicans

have voted to reopen, three Democratic senators have done the brave thing, come across the line, and we're coming home, and it's a global embarrassment that these Democrats are doing, and it's a global embarrassment that these Democrats are doing, and I think part of it is the mainstream media is not holding them accountable. If the Republicans were doing this,

any time the Republicans have refused to reopen the government, the amount of the terrible press that they get from the mainstream media is borders on hysterical and where's the fairness here? And you're right, Maria, we are starting to eat into the economy.

And imagine this, the day after Thanksgiving is the single biggest travel day in America, biggest travel day in America. And as you said, airports are starting to close. And when families are not able to get together, they are going to blame the Democrats for this.

And I hope that they will hold them accountable, and they should be ashamed of themselves.

Well, I mean, look, we're already getting estimates of the cost to the economy. And that is exactly why I've been saying that this is becoming very dangerous. Because when you see TSA agents calling in sick and air traffic control working without pay, you start questioning whether or not flying is safe. And that could lead to not just a government shutdown, but an economic shutdown. Based on where we are today, Secretary, what would be your best estimate in terms of the impact to the economy and economic growth right now?

Well, Maria, it's very difficult to predict, but we know that it's going to be lower. And my theory of the case here is, since President Trump came into office, as you know, the Democrats have been trying to stop him. They run to the circuit courts, and then the circuit courts get overruled by the Supreme Court. They go to the media, and the media is not able to stop him. So what have they done to try to stop this great economic momentum bringing our country back from the four years of the Biden disaster, they're going to shut down the government. And, you know, it's like cutting off the cutting off your nose to spite your face. They're making things worse in an effort to stop

the momentum that this administration has. And it's inconceivable to me.

And of course, Secretary, you are being attacked by Democrats for helping Argentina. Chuck Schumer said the other day something around the lines like, you know, well, he can help Argentina, but he's not here reopening government. You pushed back at Senators Elizabeth Warren and Amy Klobuchar after their criticism of the administration's $20 billion currency swap with Argentina.

You wrote in a tweet—their remarks are Peronist, referencing the former Argentinean president, Juan Perón. Tell us what you want to say to the Democrats who are trying to triangulate this Argentinian bailout and support for one of our important allies in the middle of this government shutdown?

Well, just because the Democrats don't come to work doesn't mean we don't come to work at Treasury. And I can tell you that we have been doing—we've been working full speed. The world can't go on hold because the Democrats have shut down the government. One of our great allies in South America, President Malay, needed a bridge to go into the election.

And, you know, it's inconceivable to me, inconceivable that Senators Warren and now, unfortunately, Senator Kobershar, who's normally much more level-headed, has gotten in on this, that 47 million Argentinians, we are helping them, and a majority of them now want free markets. Argentina suffers from a legacy of financial mismanagement. The poorest segment, well, it was very interesting to me, the poorest segment of Argentinian society has switched over to President Malay.

He has their support. Young people are voting for him, and they want a different kind of life. No money has been spent. It's from the exchange stabilization fund, which I can use unilaterally. So I was able to do that. In contrast, we had been trying to help the farmers

either through payouts or activating the Farm Credit Bureau to help farmers with next year's planting season, but we can't do that because these two senators have closed, are part of the problem in closing the government. So I call on them to reopen the government.

But again, we've done an end run around them with these trade deals, and the soybean farmers are gonna be fine, no thanks to these two. And it's just inconceivable to me that they think—that they

think that these attacks are going to hold any water, that the business of the U.S. government goes on with or without them. They're just proving how irrelevant they are.

Well, this is an incredibly risky bet that they're taking, for sure. Real quick on the SCOTUS meeting happening November 5th. Secretary, what are you expecting? This is a very important hearing that the Supreme Court will be having on the president's use of the emergency as a justification for using tariffs. Are you expecting the SCOTUS to go your way?

And if it doesn't, won't the U.S. have to pay back what, $150, $200 billion in tariff revenue already collected?

Well, Maria, the revenue has been very helpful in terms of the, we had a lower deficit this year, not by much from the big mess that we were left with the Biden administration. But just think about what's happened over the past months and the past weeks. If we are able to solve this fentanyl crisis, then it will have been because of the president

invoking IEPA, which is an emergency authority. If the fentanyl crisis is not an emergency, I don't know what is. When the Chinese on October 8th threatened to put up here and think about this when the Chinese on October 8th threatened to put on these global export controls on rare earth magnets that could have shut down our industrial base, the industrial base of the world.

The president was able to exercise just the threat of 100% tariffs to negotiate with, and the idea that that negotiating leverage could be taken away from the president of the United States. Because I tell you, it would have been a mess if this rare earth regime had gone in, could have caused substantial single digits decline in GDP, massive job losses across the country. So I am sure that SCOTUS will take this into account

as they are doing this. The president has used the powers judiciously and in an emergency situation to help the people and the economy of the United States of America, which is why they were designed.

Yeah, such a critical issue. Secretary, as we wrap up here, I want to get your take, finally, on the Federal Reserve chairman position. You have narrowed down and disclosed the five candidates who you are considering as the next chairman of the Federal Reserve, Kevin Hassett, Chris Waller, Kevin Walsh, Rick Reeder and Michelle Bowman.

Can you give us any sense of when we will get that announcement?

Sure. We're going to be doing a second round of interviews, and I hope after Thanksgiving sometime in early December, we'll be presenting a set of candidates to the president. It will be his decision. And I would imagine that we would have a candidate by Christmas. And I can tell you, Maria, that the decision by the Federal Reserve yesterday, the decision to cut rates by 25 basis points. I applaud, but the language that went with it tells me that this

Fed is stuck in the past. Their inflation estimates have been terrible so far this year. They keep coming down. Inflation keeps coming down. And their models are broken. And I'm just not sure what they're thinking here in terms of signaling that they may not want to cut rates at the December meeting. They've got a lot to answer for, not only for this year, but for many years past, both in their GDP estimates and their inflation estimates, which are consistently wrong. And we're going to find a leader who is going to revamp the entire institution in terms

of process and inner workings.

Yeah, I think you make a great point. I mean, it's worth noting the fact that Jay Powell had to also add that extra, well, don't expect that this is going to be the beginning of some string of rate cuts. But, you know, the problem is, is that the government's closed and we don't really have any data to actually assess the economy. So as my final question, Secretary, how would you assess the macro story right now, given

the fact that we are watching a dearth of data and have no idea in the face of some serious job cuts that have been announced, Amazon cutting jobs, UPS cutting jobs, these are corporate jobs. What can you say about the macro story in the face of all of that?

Maria, what I can say is I think I'm very optimistic for 2026, both in terms of growth and the inflation levels. I think we're going to go back to the same environment that we had under President Trump's 1.0, where we had high growth and low inflation. You look at the trillions of dollars coming into the US,

I think that we're gonna break ground on these factories. We are seeing a big increase in productivity, and I think the job growth will rebound very strongly. And, more importantly, I think the real after-tax wages for working Americans are going to go up.

As you may know, I'm also the IRS commissioner, and we can see that President Trump's campaign promises — no tax on tips, no tax on Social Security, no tax on overtime, that working Americans have not changed their withholdings. So we should be seeing substantial refunds in the first quarter of next year. Working Americans will change their withholding, and that will give them an immediate boost to their earnings on January 1st of next year.

Because what's really happened here is the low-end consumer has gotten killed and President Trump has promises made, promises kept on his campaign promises. And it's gonna start flowing through to working Americans next year.

We're gonna have, you know, Wall Street's done great, and Main Street can do great also. So I think we're going to have parallel prosperity next year.

That's wonderful to hear. And, Secretary, I want to thank you so much for all of your efforts. Obviously, it is making a huge difference for the American people. And as you always say, President Trump doing peace deals, tax deals and trade deals, obviously resonating with the American people. And we thank you both, sir.

Thanks for this substantive interview this morning, sir.

Good Maria, and he's doing them all over the world. Good to see him.

And to you. Thank you. Treasury Secretary Scott Besant this morning, this evening in South Korea. We'll be right back. We'll be right back.

Stay with us.