❓WHAT HAPPENED: Chinese President Xi Jinping ousted Li Chenggang—one of the Chinese Communist Party’s top trade negotiators—after U.S. Treasury Secretary Scott Bessent publicy derided Li as “unhinged” amid escalating tensions over China’s rare earth mineral export restrictions and U.S. tariff policies.
👤WHO WAS INVOLVED: Chinese President Xi Jinping, Li Chenggang, U.S. Treasury Secretary Scott Bessent, and U.S. President Donald J. Trump.
📍WHEN & WHERE: The removal was announced Monday; recent events include a Washington, D.C., meeting in August and upcoming talks in Malaysia this weekend and South Korea at the end of the month.
💬KEY QUOTE:“There was a… trade person who was slightly unhinged here in August” – Scott Bessent.
🎯IMPACT: The leadership change signals potential shifts in Beijing’s trade strategy as U.S.-China dialogue resumes, aiming to de-escalate the renewed trade war sparked by China’s export restrictions on critical rare earth minerals.
One of the Chinese Communist Party’s (CCP) top trade negotiators has been abruptly dismissed by China’s President Xi Jinping after his conduct in ongoing trade talks was pulbicly criticized by U.S. Treasury Scott Bessent. Li Chenggang was removed from his positions as China’s Permanent Representative to the World Trade Organization (WTO) and Deputy Permanent Representative to the United Nations (UN) in Geneva by Xi, according to CCP-controlled state media. The moved comes after Bessent last week said was Li “unhinged” and “very disrespectful” during negotiations held in Washington, D.C. this past August.
Speaking at an economic forum last week, Bessent referred to an “unhinged” Chinese trade official present at the August trade talks, before identifying Li by name. The U.S. Treasury Secetary went on to reveal that Li “threat[ened] China would unleash chaos on the global system if the U.S. went ahead with our docking fees for Chinese ships,” noting he believed Li’s behavior was an intentional political stunt planned by Beijing. At an earlier event, Bessent recalled the same incident, stating: “He showed up uninvited in Washington and said, ‘China will cause global chaos if the port shipping fees go through.'”
The dismissal of Li comes amid a sharp escalation in the ongoing U.S.-China trade war after the CCP announed it is implementing unprecedented export controls on rare earth mineral exports—essential materials for advanced technology manufacturing. In response to the move, U.S. President Donald J. Trump announced the U.S. will impose a 100 percent tariff on all Chinese imports unless China abandons the restrictions. Notably, other U.S. officials present at the impromptu August trade talks describe Li as having delivered a one-sided political lecture to his American counterparts.
Li’s exit comes ahead of a meeting between U.S. and Chinese trade representatives this coming weekend in Malaysia. The talks are seen as seen as an important preliminary step before Trump and Xi meet in South Korea later this month.
Xi’s decision to oust Li from the trade negotiations could signal a significant deescalation by China as it looks to boost exports in the face of unchecked deflation in the country’s economy. Thus far Xi’s government has been unable to stimulate domestic consumer demand, meaning Chinee manufacturers continue to be overly reliant on exports to generate profit.
“I think that things have de-escalated,” Bessent said, alluding that Li’s dismissal was imminent. He added: “We hope that China will show the respect that we have shown them, and I am confident that President Trump, because of his relationship with President Xi, will be able to get things back on a good course.”
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