Li, during a visit to Washington in August, had allegedly threatened that “China would unleash chaos on the global system if the US went ahead with our docking fees for Chinese ships”, Bessent said in an interview with media outlet CNBC on Wednesday.

His behaviour was “slightly unhinged”, Bessent added.

China’s Xinhua news agency published on Monday a list of ambassadorial appointments and changes, including the removal of Li from his posting as the country’s permanent representative to the WTO.

When asked if this move was related to Bessent’s comments, Beijing’s foreign ministry told AFP that “this is a routine personnel change”.

Li remains China’s international trade representative and vice minister of commerce.

He led a Chinese delegation to Washington for trade talks in August where he urged “equal dialogue and consultation” between the two nations, according to a statement from China’s commerce ministry.

China and the US agreed over the weekend to conduct another round of trade negotiations in the coming week, as the world’s two biggest economies seek to avoid an escalation of its tariff row.

Beijing announced this month sweeping controls on the critical rare earths industry, prompting US President Donald Trump to threaten 100% tariffs on imports from China in retaliation.

Tit-for-tat port fees also took effect last week after Beijing announced “special port fees” on US ships arriving at Chinese ports, following a similar move by the United States announced in April.