U.S. Treasury Secretary Bessent: “Tariffs on China are unsustainable and major trade deal could be reached in future”

In a Bloomberg interview, he emphasized rapid progress in global trade negotiations and encouraged U.S. allies to act quickly, noting that early movers typically secured better deals.

During the 90-day suspension of new tariffs, the U.S. may reach preliminary agreements with several countries. Bessent acknowledged that while protection against Chinese imports was understandable, the current tariffs were significant and unsustainable.

Although decoupling from China is not inevitable, it remains a possibility, especially given China’s dual role as the U.S.’s top economic rival and military adversary. Bessent highlighted the good relationship between Presidents Trump and Xi as a key factor in potential top-level negotiations.

Bessent also dismissed concerns about the abandonment of U.S. assets, citing strong foreign demand in bond auctions and affirming the U.S. dollar’s status as the global reserve currency. He regularly meets with Fed Chair Jerome Powell and believes the U.S. is far from a financial crisis.

Looking ahead, discussions about Powell’s successor will begin in the fall. On fiscal tools, Bessent stressed the government had a wide range of options, including increasing bond buybacks if needed. He assured that the administration was taking a careful and market-friendly approach to tariffs.