Treasury Secretary Scott Bessent said on Thursday that trade relations between the U.S. and China are stabilizing such that the Trump administration can turn some of its focus to broader economic issues with Beijing.
Bessent was interviewed on FOX Business Network’s “Kudlow” and said that while trade tensions with China ramped up significantly following the president’s “Liberation Day” tariff announcement, they have since settled down to allow for a broader economic conversation with China.
“Right after April 2, we got into a tit-for-tat – we were at 145% tariffs, they were at 125%, which is really an embargo,” Bessent told host Larry Kudlow. He noted that following negotiations in Geneva, U.S. tariffs are down to 30% on China, with 20% tariffs left over from Trump’s first term, while China has a 10% tariff on U.S. exports. Bessent also said “trade is in a good place” between the two countries.
“I think we’re going to be able to move on to the bigger issue of China needing to rebalance,” Bessent said. “It is the most imbalanced, unbalanced economy in the history of the world.”
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“They now account for 30% of global manufacturing, that’s unsustainable. They have a real estate downturn, many would call it a crisis. Manufacturing has slumped and they can’t export their economic problems to the rest of the world, they need to solve them,” he added.
“One of the ways to solve them is to create a consumer economy, and we’ll be talking about that,” Bessent said of the Chinese economy’s heavy reliance on manufacturing.
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The treasury secretary also said the Trump administration will press the Chinese government to curb its purchases of Russian and Iranian oil to help address geopolitical risks posed by Russia’s invasion of Ukraine and Iran’s pursuit of a nuclear program as well as its support for terrorism.
“We’ll be talking about the fact they do buy sanctioned Iranian oil, Russian oil. You know, if they would pause those purchases for 3 or 6 months, I think that the Russian war machine would grind to a halt, Iran negotiations would be much easier, so we’ve got a whole range of things,” Bessent said.
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