Trump's Treasury Secretary says US-China's trade war is not “sustainable” – state
U.S. Treasury Secretary Scott Bessent said in a speech on Tuesday that the ongoing tariff showdown on China is unsustainable and he expects a “reduction” in the trade war between the world's two largest economies.
But in Washington's private speech to JPMorgan Chase, Bessent also warned that negotiations between the United States and China have not officially begun. U.S. President Donald Trump's import tax on China is 145%, which is already in conflict with the 125% tariff on U.S. goods.
Trump has signed tariffs to dozens of countries, causing stock markets to stumble and increase interest rates to increase U.S. debt as investors fear lower economic growth and higher inflationary pressures.
Details of Bessent's speech were confirmed by two people familiar with the remarks discussed anonymously.
“I do say China will be a barrier in terms of negotiations,” Bescent said. “Both sides believe the status quo is sustainable.”
The S&P 500 rose 2.5% after Bloomberg News initially reported Bessent's speech.
Trump then acknowledged in a comment to reporters on Tuesday that the stock market was rising, but he avoided confirming whether he also believes the situation with China is unsustainable, as Bessent said behind closed doors.
“We have done a good job with China,” Trump said.
Despite Trump's high tariffs, he said he was “very good” to China, rather than playing hard balls with Chinese President Xi Jinping.
“We will live together very happily and ideally,” Trump said.
The U.S. president said the final tariff rate with China will be “significantly lowered” compared to the current 145%.
“It won't be that high, it won't be that high,” Trump said.
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The Trump administration held talks with Japan, India, South Korea, the EU, Canada and Mexico, among others. But Trump showed no public signs that he planned to withdraw the 10% tariff of the benchmark, even though he insisted that he was looking for other countries to cut his import taxes and remove any non-advocacy barriers the administration said, leaving U.S. exports hampering U.S. exports.
China warned other countries on Monday against reaching trade agreements with the United States, which could have a negative impact on China.
“China is firmly opposed to any party that reaches an agreement at the expense of China's interests,” the Ministry of Commerce of China said in a statement.
White House press secretary Karoline Leavitt said the Trump administration has received 18 proposals to reach a deal with other U.S. countries, adding: “Everyone involved wants to see a trade deal.”
Trump: “I have no intention” to fire the U.S. Federal Reserve Chairman
Uncertainty about Trump's call for the Fed to lower its benchmark interest rate has also been widened, and the president said he could firefight Fed Chairman Jerome Powell if he wanted to.
Levitt said Trump believes the impact of the Fed's waiting for tariffs is “in the name of politics, not in the name of fit for the U.S. economy.”
Trump later said he hoped Powell would “be early” in lowering interest rates, although he had previously suggested he would launch the Fed chairman.
“I have no intention of firing him,” Trump told reporters.
Powell said Trump's tariffs are creating uncertainty about lower growth and higher inflationary pressures, and the president believes inflation concerns are essentially non-existent.
Trump said the president believes energy and grocery prices are falling, so the Fed should lower its benchmark interest rate because inflation no longer poses a threat to the U.S. economy. His remarks suggest he still plans to use the bullying podium to put pressure on the U.S. central bank, which is committed to resisting political pressure as part of its mission to stabilize prices and maximize employment.
Trump's frustration led him to post on social media last Thursday: “Powell's firing cannot be swift!”
The term of the Federal Reserve Chairman will end in May 2026.
Trump continued to express his grudges with Powell on Tuesday, despite his statement that the Fed chairman will continue to do the job despite the president’s belief that inflation is no longer a problem.
“Everything is falling,” Trump said. “The only thing that hasn't dropped but hasn't risen too much is interest rates. We think the Fed should lower interest rates. We think it's a great time to lower interest rates. We want to see our chairman in time or on time, not late. The late period is not good.”
Trump once again attacked Powell with his truth-society narrative on Monday, saying “little is there inflation.”
The comment was established in a statement issued by Trump last week, which he thought he could fire Powell, a move that shocked financial markets and scared investors that interest rates could be affected by political rather than economic fundamentals.
“If I want him out, he will leave there soon, believe me,” Trump said in the Oval Office last Thursday. “I'm not happy with him.”
The Fed has further lowered its federal funding rate, which affects the money supply by setting the rate at which banks can charge each other overnight loans. Since last August, the rate is actually 4.33%, which is a full percentage point.
Initially, the Fed initially increased this rate due to rising inflation during Joe Biden's presidency, a byproduct of the global economy, recovering from the common 19th pandemic after Russia's invasion of Ukraine in 1922, and higher energy and food prices.
But Powell is also willing to challenge the president's trade policy. He said in a speech in Chicago last week that Trump's tariff policy would damage the U.S. economy, a direct warning to the White House to try to make import taxes positive for the country for a long time.
“The levels of tariffs announced so far are much larger than expected, and the economic impact may be correct, including higher inflation and slower growth,” Powell said last week at the Chicago Economic Club last week.
