Treasury Secretary Scott Bessent told private investors during a meeting on Tuesday that the spiraling trade war between the United States and China was unsustainable and that he expects a “de-escalation” soon, according to a report from the Associated Press (AP).
Newsweek has reached out to the White House for comment on Tuesday.
The Context
The trade war has seen the Trump administration impose a staggering 145 percent duty on exports from China, which has retaliated with a 125 percent tariff on American goods.
China has vowed to “fight to the end” on tariffs and has threatened countermeasures against any nation that “appeases” the United States. Beijing has also taken nontariff punitive measures against America, including imposing trade controls on rare earth exports, restricting Hollywood exports and other actions against American companies operating within its borders.
The tit-for-tat tariff dispute has rattled global markets, which have been volatile since President Donald Trump first announced his “reciprocal” tariffs on April 2.
What To Know
In the private speech on Tuesday for JPMorgan Chase in Washington, D.C., Bessent said that he worried negotiating with China was going to be a “slog” and that official talks between the two countries had not yet begun.
He also told investors, according to a transcript of the speech obtained by AP, that neither the U.S. nor China believed that the tariffs were sustainable. News of Bessent’s concerns had an affect on the S&P 500, which rose on Tuesday.
Trump showed some signs of softening on China after news broke of Bessent’s comments. The president said at a White House news conference that the high tariffs on Chinese goods will “come down substantially, but it won’t be zero.” But he avoided confirming whether he also believed the trade war with China was unsustainable, telling reporters, “We’re doing fine with China.”
He added that he plans to avoid playing hardball with Chinese President Xi Jinping and instead will be “very nice” to Beijing.
Progress on a trade deal with China may be slow but the Trump administration said that it has received 18 proposals from other countries, and has taken vital steps to securing an agreement with India.
But Trump has shown no indications that he plans to permanently pull back his baseline 10 percent tariff.
What People Are Saying
Bessent, in a private speech in Washington for JPMorgan Chase, according to a transcript obtained by the AP, “I do say China is going to be a slog in terms of the negotiations. Neither side thinks the status quo is sustainable.”
Trump told reporters at the White House on Tuesday, referring to his relationship with Xi, “We’re going to live together very happily and ideally work together.”
White House press secretary Karoline Leavitt told reporters on Tuesday, “We’re doing very well with respect to a potential trade deal with China. The president and the administration are setting the stage for a deal with China. Everyone involved wants to see a trade deal happen and the ball is moving in the right direction.”
China’s Commerce Ministry said in a statement, “China firmly opposes any party reaching a deal at the expense of China’s interests.”
What Happens Next
Trump’s current pause on tariffs to all nations except China ends on July 8.
Alex Brandon/AP
