US Treasury Secretary expects de-escalation in China tariff case

(Patria) - The trade standoff between Washington and Beijing is unsustainable, said US Treasury Secretary Scott Bessent, after President Donald Trump announced that high tariffs on many Chinese import products would be "significantly reduced", AFP reported.

Speaking at a closed-door event organized by JPMorgan Chase, Bessent said that the huge tariffs that the two largest economies in the world have imposed on each other's imports this year represent a reciprocal trade embargo, but that he expects de-escalation.

Since Trump's return to the White House in January, the US has imposed additional tariffs of 145 percent on many products from China. This includes duties originally imposed due to China's alleged role in the fentanyl supply chain, and later due to practices that Washington considered unfair.

Trump admitted on Tuesday that 145 percent is a "very high" level and that it will be "significantly reduced".

"They won't be anywhere near that number," he said, adding, however, that "it won't be zero".

Beijing has responded to Washington's latest salvo with comprehensive counter-tariffs of 125 percent on American goods.

Bessent told the JPMorgan event on Tuesday that he expects de-escalation in the near future, according to a person who was in the room. Such a development should bring some relief to the markets, he added at the event, which was not open to the media.

Major Wall Street indices jumped following reports of these Bessent comments at an event on the sidelines of the spring meetings of the International Monetary Fund and the World Bank.

Bessent said there is a lot to do with China. He pointed to the need for fair
trade and said that China needs to rebalance its economy. He emphasized that the goal is not to decouple from China, noting that orders in both countries have recently fallen as trade tensions have escalated.

On Tuesday, White House Press Secretary Karoline Leavitt told reporters that Washington is "doing very well in terms of a potential trade deal with China", that "the President and the administration are laying the groundwork for a deal", noting that "the ball is moving in the right direction".

Leavitt said there is a sense that the parties involved want to see a trade deal.