Treasury Secretary Scott Bessent on Monday said the United States is in talks with China about how to de-escalate a trade war that reignited last week after Beijing announced plans to impose export controls on rare earth magnets used in a variety of high-tech products.

“There has been substantial communications over the weekend,” Bessent said in an interview on Fox Business, adding that more “staff level” talks are expected this week in Washington when Chinese officials are in town for the annual fall meetings of the World Bank and the International Monetary Fund.

Bessent also said he expects President Donald Trump will still meet with Chinese President Xi Jinping in South Korea in late October, just before that country hosts the annual meeting of leaders from the 21 economies in the Asia-Pacific Economic Cooperation.

Trump threatened last week to impose 100 percent tariffs on Chinese goods beginning Nov.1 and cancel the meeting with Xi after China announced the rare earth export restrictions. That caused financial markets to sell off Friday in the face of renewed concern about an escalating trade war between the world’s two largest economies.

Bessent said he expected to hold talks in Asia with his Chinese counterpart, Vice Premier He Lifeng, before the Trump-Xi meeting in South Korea.

While sending the message the overall U.S.-China relationship is in “good” shape and Trump’s “100 percent tariff does not have to happen,” Bessent insisted Beijing must back off its plan to restrict rare earth magnets. He also suggested a “lower level official” may have made the Chinese decision to restrict exports, rather than Xi himself.

“This is China versus the world. They have pointed a bazooka at the supply chains and the industrial base of the entire free world, and we’re not going to have it,” Bessent said. “A group of bureaucrats in China cannot tell us and our allies how to run our supply system.”

The U.S. also expects to get substantial support for its stance from Europe, India and democracies in Asia, Bessent said.

“I believe that China is open to discussion on this. And if they’re not, we have substantial levers on our own … side that we can pull,” he added.

In the midst of tensions earlier this year, the United States imposed 12 countermeasures on China that were “highly” effective, ranging from natural resources used in plastic production to jet engines and parts, Bessent said.

The Treasury chief also hinted at the possible expulsion of the hundreds of thousands of Chinese students now in the United States and other possible actions in areas of software, minerals and financial services if China does not back down.

“We have plenty of straight, brute-force countermeasures that we can pull,” Bessent said.