US Treasury Secretary Scott Bessent told a closed-door investor summit Tuesday that the tariff standoff with China cannot be sustained by both sides and that the world’s two largest economies will have to find ways to de-escalate.
That de-escalation will come in the very near future, Bessent said during an event hosted by JPMorgan Chase & Co. in Washington, which wasn’t open to the public or media. He characterized the current situation as essentially a trade embargo, according to people who attended the session.
Bessent said that it was not the US’s goal to decouple from China and that the current status quo of 145% tariffs on Chinese goods by the US and 125% tariffs on US products by China was not sustainable. He expressed optimism that tensions could cool in the coming months, which would bring relief to markets, but cautioned that a larger deal could take longer.
President Donald Trump, asked about Bessent’s comments later Tuesday, said the US was “doing fine” with Beijing and that he did not anticipate a “hardball” negotiation. Trump pledged to “be very good to China.”
The final tariff on China, Trump predicted, would not be “anywhere near” the 145% level he has set.
“We’re going to be very nice,” Trump said. “They’re going to be very nice, and we’ll see what happens. But ultimately, they have to make a deal, because otherwise they’re not going to be able to deal in the United States.”
The Treasury chief told attendees that a comprehensive deal between the two countries could happen in two to three years. He also reiterated his contention that China has stifled its consumer economy and favored manufacturing at the US’s expense, and said that any agreement would require a rebalancing of trade that allowed the US to increase manufacturing.
US stocks rose after his comments, with the S&P 500 index gaining as much as 2.9%. It closed up about 2.5% in New York, while the dollar rose and Treasuries steadied.
The eagerness to demonstrate progress on trade deals was evident at the White House on Tuesday, even as administration officials stopped short of signaling that there had been genuine movement on agreements. Press Secretary Karoline Leavitt said that 18 different nations had brought trade offers to the White House and that the president’s trade team was meeting with 34 countries this week about possible agreements.
She also said that Trump had told her Tuesday the US was “doing very well in respect to a potential trade deal with China,” while sidestepping questions about whether there had been an actual conversation between the US president and Chinese leader Xi Jinping.
Separately, Politico reported that the White House was close to announcing high-level agreements with Japan and India – though those are expected to largely signal a willingness to negotiate on specific topics, with details to be worked out over months or even years. Leavitt declined to say whether those framework announcements would be enough to stave off the resumption of tariffs at the end of the 90-day pause.
Bessent was speaking on the sidelines of the International Monetary Fund and World Bank’s spring meetings, as finance ministers and central bankers gather from around the world to assess the fallout of Trump’s trade war.
Bessent is scheduled to speak Wednesday morning at an event hosted by the Institute of International Finance. he said in a post on X that he will share his “thoughts on the state of the global financial system,” during a keynote address and fireside chat hosted by the organization.