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Scott Bessent, the US Treasury Secretary, has stated that any reduction in the ongoing US-China trade war would need to be a mutual effort, dismissing the notion that President Donald Trump might independently reduce tariffs on Chinese imports. Bessent, speaking to journalists, reiterated his stance that both nations must work towards de-escalation, echoing his previous comments at a JPMorgan conference where he deemed the trade conflict with China “unsustainable.”
He characterized the high tariffs imposed by both the US and China as akin to an embargo. Currently, the US has levied a 145 percent duty on Chinese goods, prompting Beijing to impose a 125 percent duty in response. Bessent emphasized that a trade rift would not benefit either nation. When questioned about the possibility of the US unilaterally reducing trade tensions, Bessent was firm in his denial.
His comments followed a report from The Wall Street Journal that suggested Trump was contemplating a unilateral tariff decrease on Chinese goods. In response to inquiries about the timing of a potential tariff reduction, President Trump noted that it depended on China. When asked about his concern regarding the impact of his tariffs on American small businesses, Trump expressed no concern, stating that the high tariffs essentially halt business with China.
Trump added that direct communication between the US and China occurred daily, although official trade negotiations have yet to take place. Bessent noted that despite ongoing working-level talks, formal negotiations are absent.
On the stock market, Bessent’s comments led to a slight decrease in the earlier gains, with the S&P 500 closing 1.7 percent higher, and the Nasdaq Composite up by 2.5 percent. The markets had previously declined amidst concerns that Trump might dismiss US Federal Reserve Chair Jay Powell, an idea he later dismissed.
Steven Grey, Chief Investment Officer at Grey Value Management, highlighted that uncertainty and inconsistency from the administration pose economic risks. Bessent further mentioned that there have been no discussions between the two countries about trade, with sources indicating China perceives Trump’s tariffs as economic coercion.
Bessent remarked that both sides await each other for talks, without specifying a timeline. Trump’s acknowledgment of past Chinese tariffs and his current reversal forms part of this narrative. Meanwhile, trade data revealed a 64 percent drop in maritime container bookings from China to Washington, reflecting the harsh economic climate between the two nations.
President Trump has expressed a desire to negotiate directly with Chinese President Xi Jinping. However, Chinese officials insist that groundwork must be laid by negotiators before any high-level talks can occur. During a recent White House meeting, the CEOs of Walmart and Target reportedly communicated the negative impact of tariffs on trade.
A New York investor pointed out the difficulty in interpreting statements from Bessent and Trump, suggesting the market remains volatile and uncertain in response to their comments.