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Trade war with China not 'sustainable', says US Treasury Secretary
US President Donald Trump also reportedly said that US was "doing very well" regarding a "potential trade deal with China".
China-US Trade War: US Treasury Secretary Scott Bessent on Tuesday said that the ongoing tariff war against China is unsustainable, saying that a 'de-escalation' in the trade war between the two nations is expected in the near future.
During a private speech in Washington for JPMorgan Chase, Bessent cautioned that talks between the US and China were yet to formally start.
Just last week, the Trump administration announced a sweeping new tariff of up to 245 per cent on Chinese imports, triggering a sharp escalation of the trade war between the US and China. The decision reflected in a fact sheet released by the White House.
“China now faces up to a 245% tariff on imports to the United States as a result of its retaliatory actions,” the White House said.
This tariff percentage includes a 125 per cent reciprocal tariff, a 20 per cent tariff to address fentanyl crisis, and Section 301 tariffs on specific goods, between 7.5 per cent and 100 per cent.
ALSO READ | Tariffs up to 245% on China: Trump's latest salvo in ongoing trade war
China, meanwhile, countered Trump's levies with a 125 per cent tariff on American goods and said that Washington's imposition of "abnormally high tariffs on China seriously violates international and economic trade rules".
The sweeping Trump tariffs on several countries have led the stock market to tumble down and interest rates to increase on US debt as investors' fear of slower economic growth continued to loom.
"I do say China is going to be a slog in terms of the negotiations," The Associated Press quoted Bessent as saying. "Neither side thinks the status quo is sustainable," he added.
He also said that a de-escalation of the trade war between the world's two largest economies will come in the very near future. He said at the JPMorgan Chase event that a comprehensive deal between China and the US could happen in two to three years.
Soon after Bessent's remarks, US stocks rose, with the S&P index gaining as much as 2.9 per cent, a Bloomberg report said.
‘Potential trade deal with China'
So far, the Donald Trump administration has met with representatives from Japan, India, South Korea, the European Union, Canada and Mexico, among other nations, to talk about the US tariffs.
ALSO READ | Trump tariffs torch chances of meeting with China's Xi, say analysts
While negotiations over his sweeping reciprocal tariffs are a possibility, the US president has not shown any public indications that he plans to remove his baseline 10 per cent tariff.
White House press secretary Karoline Leavitt told reporters that Trump told her "we're doing very well" regarding a "potential trade deal with China".
On Monday, China issued a warning to other countries against making trade deals with the US that could have a negative impact on Beijing. The Chinese commerce ministry said in a statement, "China firmly opposes any party reaching a deal at the expense of China's interests."
Leavitt said that so far the Trump administration has received 18 proposals from other countries for their respective trade deals with Washington, noting that "everyone involved wants to see a trade deal happen".
The tensions in the financial markets have also been significantly amplified because of Trump's calling on the Federal Reserve to cut its benchmark interest rate and his statement that he could fire Fed Chair Jerome Powell if he wanted to do so.
Leavitt said that Donald Trump believes the Fed has by holding rates steady as it awaits the tariffs' impacts "in the name of politics, rather in the name of what's right for the American economy".
Additionally, a Politico report also stated that the White House was close to announcing a high-level agreement with both Japan and India. Though, these are expected to largely signal a willingness to negotiate on specific topics impending detailed layout.
(with inputs from agencies)
