US Treasury Secretary Bessent: Tariffs on China are not sustainable

In an interview with Bloomberg, Bessent emphasized that the US is making rapid progress in negotiations with many of its key trading partners.

Signaling to US allies that they need to be quick in negotiations, Bessent pointed out that the party that makes the first move often secures the best deal.

Bessent said that they could reach agreements in principle with many countries during the 90-day period in which additional tariffs are paused.

Reminding that customs duties on China have been implemented, Bessent stated that countries might want some protection against Chinese goods flooding their markets.

In response to a question about whether there are any negotiations with China at any level, Bessent stated that this needs to come from the top, noting that US President Donald Trump and Chinese President Xi Jinping have a good relationship.

Regarding the customs duties the US has imposed on China, Bessent said, "The customs duties on China are large figures; nobody thinks they are sustainable and nobody wants them to stay. But these rates are far from being a joke."

Bessent noted that there does not have to be a decoupling between Washington and Beijing, but that it could happen.

"WE HAVE A LARGE TOOLKIT"

Stating that he does not believe US assets are being abandoned, Bessent expressed that they are seeing increased foreign competition in bond auctions.

Bessent said that the dollar is still the global reserve currency and that they have strong dollar policies.

Explaining that he meets with US Federal Reserve (Fed) Chair Jerome Powell every week, Bessent stated that they are far from a "break the glass" situation.

Regarding the question of who will replace Powell, whose term expires in May 2026, Bessent announced that they will begin meeting with potential candidates for the chair position in the fall.

Stating that they are "very far" from needing to take action regarding the bond market, Bessent said, "We have a large toolkit we can use. We can increase buybacks if we want to."

Bessent also noted that they will conduct a robust process regarding tariffs and that the market can have great comfort in this regard.

News Source: AA