According to the Wall Street Journal, Chinese officials believe President Donald Trump’s focus on the stock market gives them an advantage in the ongoing trade dispute. They believe that the United States cannot afford a prolonged and intense trade war, a scenario that they expect will cause the collapse of financial markets and pressure the president to make concessions.
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However, the Trump administration rejected the idea that market performance would influence negotiations. “We’re not going to negotiate because the stock market is going down, we’re going to negotiate because we’re doing what’s best economically for the United States,” Treasury Secretary Scott Besent said at a CNBC event. He added that the United States is not seeking to escalate trade tensions in the wake of the president’s recent threats of triple-digit tariffs, which caused the market to plunge last Friday. The Dow Jones Industrial Average posted its worst single-day performance since April, when the president’s trade wars began.
While the president toned down his aggressive rhetoric, Picent stressed that further retaliatory measures were not ruled out. “We have a lot of tools we can use to get the products they need that can be just as harmful. We don’t want to hurt their economy,” Besant said. “We don’t think they want to harm our economy. But they are a command-and-control economy, and they will not order us or control us.”
Tensions escalated after Beijing imposed restrictions on the export of rare earth minerals for the second time this year. These metals are important components of electronics, cars and other goods, and the move threatens supply chains. The latest standoff comes ahead of a scheduled meeting between President Trump and Chinese leader Xi Jinping at an economic summit in South Korea later this month, which Picent confirmed was still scheduled to happen.
In a related development, President Trump threatened to impose a US ban on Chinese cooking oil sales in a social media post. Agriculture Department data show that the United States accounted for 43% of China’s exports of used cooking oil in 2024.
Source: Market intelligence platform IndexBox
