Chinese President Xi Jinping removed and replaced Li Chenggang as one of Beijing’s top trade negotiators, state news agency Xinhua reported Monday, after the U.S. Treasury Secretary called him “unhinged.”
It comes as the U.S.-China trade war reignites after Beijing tightened its rare earth export controls, prompting U.S. President Donald Trump to threaten a 100 percent tariff in retaliation.
Li was removed as Permanent Representative of the People’s Republic of China to the World Trade Organization (WTO), Ambassador Extraordinary and Plenipotentiary, and Deputy Permanent Representative to the United Nations Office at Geneva and other international organizations in Switzerland. He was replaced by Li Yongsha.
Li, 58, had played a key role in the recent U.S.-China trade talks.
Bessent Called Li ‘Unhinged’
The week before, Bessent had described a meeting with Li in Washington at which he had threatened the U.S. over the issue of shipping fees.
“There was a lower-level trade person who was slightly unhinged here in August,” Bessent told CNBC in an appearance at the network’s Invest in America forum, and referenced Li by name.
Li was “threatening … that China would unleash chaos on the global system if the U.S. went ahead with our docking fees for Chinese ships,” Bessent said.
“This is clearly something that they were planning all along,” Bessent said, referring to the new export controls on rare earths.
Rare earth minerals and metals are vital components in the manufacture of a wide range of high-tech products, so they are highly prized.
An unnamed source told Reuters that Li had arrived in Washington uninvited, demanded meetings and “lectured the Americans.”
Trump and Xi Expected to Hold Talks
U.S. and Chinese officials are likely to hold talks this weekend in Malaysia, Bessent said on Friday.
The talks will lay the groundwork for an expected meeting between Xi and Trump in South Korea at the end of the month.
“I think that things have de-escalated,” Bessent said.
“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.”
