US Treasury Secretary Scott Bessent has indicated a potential shift in the ongoing trade standoff with China, suggesting that current tariff levels are unsustainable and that both nations will need to find ways to de-escalate tensions, according to multiple media reports.
Speaking at a closed-door investor summit hosted by JPMorgan Chase & Co. in Washington, Bessent described the current trade environment as essentially a trade embargo, with the US imposing 145 percent tariffs on Chinese goods and China retaliating with 125 percent tariffs on US products.
Despite the current tensions, Bessent conveyed optimism that the situation could improve in the coming months, offering potential relief to volatile markets. However, he also tempered expectations by stating that a comprehensive trade deal between the two economic giants could take two to three years to materialise.
According to attendees of the session, Bessent emphasized that the US is not seeking to decouple from China but desires a rebalancing of trade that allows the US to bolster its manufacturing sector. He reiterated his view that China has historically stifled its consumer economy while prioritising manufacturing at the expense of the US.
[See more: China appoints a new trade envoy and tells US to stop portraying itself as a victim]
Bessent’s comments triggered a positive response in financial markets. Wall Street stocks rallied, and oil prices climbed following the news that a potential easing of trade tensions might be on the horizon. The S&P 500 and Nasdaq Composite both saw significant gains, although they later gave up some of those gains in afternoon trading.
However, sources familiar with the situation cautioned against reading too much into Bessent’s remarks. They indicated that there are currently no active negotiations between the US and China to resolve the trade dispute.
While Bessent expressed hope for an eventual agreement, others familiar with the matter suggested that both sides remain far from finding a solution.
There is also uncertainty about whether President Trump aligns with Bessent’s views on the matter. Despite these uncertainties, the White House maintains that the US is “doing very well” in the ongoing dispute with China. Experts suggest that Bessent’s comments may be aimed at stabilising markets amid current trade tensions.
The first draft of this article was prepared by AI and then checked by an editor.
