US Treasury secretary says trade war with China is not ‘sustainable’
WASHINGTON: US Treasury Secretary Scott Bessent stated in a speech on Tuesday that the ongoing tariffs dispute with China is unsustainable, and he anticipates a “de-escalation” in the trade war between the world’s two largest economies.
However, in a private speech in Washington for JPMorgan Chase, Bessent cautioned that formal talks between the United States and China had not yet begun. US President Donald Trump imposed import taxes of 145% on China, which retaliated with 125% tariffs on US goods. Trump has placed tariffs on several countries, causing the stock market to falter and interest rates on US debt to rise as investors worry about slower economic growth and higher inflationary pressures.
Details of the speech were confirmed by two individuals familiar with the remarks, who requested anonymity to discuss them.
“I do say China is going to be a slog in terms of the negotiations,” Bessent said, according to a transcript obtained by The Associated Press. “Neither side thinks the status quo is sustainable.”
The S&P 500 stock index rose 2.5% after Bloomberg News initially reported Bessent’s remarks.
Trump acknowledged the stock market increase in comments to reporters later on Tuesday but avoided confirming whether he also believed the situation with China was unsustainable, as Bessent had suggested privately.
“We’re doing fine with China,” Trump said.
Despite the high tariffs, Trump stated that he would be “very nice” to China and would not adopt a hardline approach with Chinese President Xi Jinping.
“We’re going to live together very happily and ideally work together,” Trump said.
The US president added that the final tariff rate with China would be reduced “substantially” from the current 145%.
“It won’t be that high, not going to be that high,” Trump said.
The Trump administration has held talks with counterparts from Japan, India, South Korea, the European Union, Canada, and Mexico, among other nations. However, Trump has shown no public indication of plans to withdraw his baseline 10% tariff, even as he has urged other nations to lower their own import taxes and remove non-tariff barriers that the administration claims have hindered US exports.
On Monday, China warned other countries against making trade deals with the United States that could negatively affect China.
“China firmly opposes any party reaching a deal at the expense of China’s interests,” China’s Commerce Ministry said in a statement.
White House press secretary Karoline Leavitt stated that the Trump administration had received 18 proposals from other countries for trade deals with the US, adding that “everyone involved wants to see a trade deal happen.”
Uncertainty over tariffs in financial markets has been further amplified by Trump’s call for the Federal Reserve to cut its benchmark interest rate. The president suggested he could dismiss Fed Chair Jerome Powell if necessary.
Leavitt said Trump believes the Fed has acted politically by holding rates steady while awaiting the effects of tariffs, rather than acting in the best interests of the American economy.
Trump later clarified that he wanted Powell to “be early” in lowering rates and that he had no intention of dismissing the Fed chair, despite previously suggesting otherwise.
By RSS/AP
