Betting on Presidential Promises

Treasury Secretary Scott Bessent is placing his chips on international diplomacy holding steady. Speaking with Fox News' "Sunday Morning Futures," he laid out his expectations for the ongoing rare earths negotiations with China, projecting a deal completion by Thanksgiving.

The confidence stems from agreements hammered out during the leaders' meeting in Korea, and Bessent seems prepared to take Xi Jinping at his word. "We haven't even finished the agreement, which we hope to have done by Thanksgiving," Bessent explained.

But here's where it gets interesting. A Wall Street Journal report recently raised eyebrows by suggesting China might limit rare earths access for U.S. military-affiliated companies. Bessent wasn't having it, dismissing those claims outright.

When pressed about what happens if China backs out, Bessent struck a balance between optimism and strategic caution. "All options are on the table, but I think we have to go into this believing that President Xi will keep his word to President Trump," the Treasury Secretary said.

Building a Domestic Alternative

This rare earths drama plays out against a larger backdrop of trade detente between Washington and Beijing. The broader trade agreement includes China's commitment to lift export restrictions on rare earth minerals, announced by the White House as part of the truce between President Donald Trump and Xi Jinping.

Meanwhile, the U.S. isn't just sitting around hoping China plays nice. The Trump administration, alongside private investors, has pumped $1.4 billion into two American startups focused on rare earth magnet production. The goal? Create a fully domestic supply chain and break free from Chinese dominance in this critical sector. It's the geopolitical equivalent of not putting all your eggs in one basket.

The China Problem, According to Bessent

Bessent hasn't exactly been shy about his views on China's economic model. Back in August, he argued that China operates "the most imbalanced economy in modern history," where state-driven overinvestment forces manufacturers to produce goods below cost. Essentially, it's a massive government jobs program masquerading as market economics. He called the whole setup "difficult to deal with."

His criticism went deeper, pointing to China's non-market structure and its dual role as both America's top economic and military rival. This combination, Bessent warned, creates unique challenges for global engagement and poses escalating risks for the worldwide economy as Chinese production capacity continues expanding.

In Sunday's interview, Bessent echoed comments from Vice President JD Vance, who said in August that the U.S. holds significant leverage in the trade standoff and expects Beijing to ultimately choose a "reasonable" path. Both Bessent and the president hope that leverage remains a theoretical option rather than something they actually need to deploy.