Bessent predicts US-China trade de-escalation, warns talks to be slow
3 Min Read
The US Treasury Secretary characterizes the current trade relationship as a “two-way embargo", highlighting that neither the United States nor China view the current high-tariff environment as sustainable.
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Treasury Secretary Scott Bessent listens as President Donald Trump speaks with reporters as he participates in a ceremonial swearing-in of Paul Atkins as chairman of the Securities and Exchange Commission, in the Oval Office of the White House, Tuesday, April 22, 2025, in Washington. (AP)
US Treasury Secretary Scott Bessent stated on Tuesday that he expects a de-escalation in US-China trade tensions, though negotiations with Beijing are yet to begin and will likely be slow. Speaking privately at a JP Morgan investor conference, Bessent described upcoming talks as a “slog", Reuters reported, citing a source familiar with the presentation.
Bessent characterized the current trade relationship as a “two-way embargo", highlighting that neither the United States nor China views the current high-tariff environment as sustainable.
However, he claimed that the Trump administration does not aim to fully decouple the two largest economies.
Instead, he said the goal is a "big, beautiful rebalancing," with China shifting towards greater consumption and the US toward enhanced manufacturing. It remains uncertain whether Beijing is prepared for such changes.
Meanwhile, US Special Envoy Steve Witkoff will visit Moscow this week for a new round of talks with Russian President Vladimir Putin about the war in Ukraine, the White House said on Tuesday.
Witkoff has previously held three long meetings with Putin on prospects for an end to the war in Ukraine.
White House Press Secretary Karoline Leavitt said President Donald Trump had met Witkoff earlier in the day and "they wanted everyone to know that the negotiations continue" and that Witkoff was headed to Russia later this week.
US tariffs on Chinese goods called unsustainable
Currently, the US imposes 145% tariffs on Chinese goods, while China applies 125% tariffs on US products. Bessent indicated this situation cannot persist and signaled that some relief could come in the very near future, which would offer a "sigh of relief" for markets.
His remarks suggest that although no formal negotiations have started, there is optimism about easing tensions soon.
Bessent’s comments added positive momentum to Wall Street, as markets rebounded from losses triggered by President Donald Trump’s recent criticism of Federal Reserve Chair Jerome Powell. Major US stock indexes rose by over 2% in afternoon trading, supported by both positive corporate earnings and hopes for US-China trade policy adjustments.
In addition to his remarks on China, Bessent indicated that the Trump administration might offer financial assistance to Argentina if external shocks threaten its economic recovery. Such support would depend on President Javier Milei’s government maintaining its reform agenda. It is worth noting that Bessent recently visited Buenos Aires to express US backing for Argentina’s $20 billion IMF loan program.
Read more: China says 'not afraid to fight' a trade war with the US
