U.S. Treasury Secretary Scott Bessent expressed on Wednesday that he anticipates that the high tariffs imposed between the United States and China will need to be reduced before any meaningful trade negotiations can take place.
Bessent addressed journalists during the International Monetary Fund and World Bank’s annual meetings, emphasizing that a reduction in tensions is essential for the two largest economies to restore balance in their trading relationship.
When questioned about whether this implied a decrease in the current U.S. tariffs of 145% on Chinese products and China’s 125% tariffs on American imports, Bessent stated, “I believe that has to happen, as neither side views these levels as sustainable. This situation resembles an embargo, and the severing of trade ties between the two nations is not in anyone’s best interest.”
Bessent refrained from confirming a report from the Wall Street Journal indicating that the Trump administration was contemplating a unilateral cut in tariffs on Chinese goods, potentially by over 50%, to lessen trade tensions. He remarked, “I would be surprised if that conversation is taking place,” asserting that there would be no unilateral reductions proposed by Trump. However, he was open to the possibility of mutual tariff reductions.
Bessent noted that the administration is striving to achieve certainty regarding tariffs through discussions with multiple countries and does not foresee this process being lengthy, as nations would prefer to avoid the higher reciprocal tariffs that were announced on April 2.
He also elucidated previous comments regarding a two- to three-year timeframe for a U.S.-China agreement, clarifying that this referred to the entire rebalancing process rather than the negotiations themselves, which he believes should occur more rapidly.
Bessent stated that the third quarter of this year seems like a “reasonable estimate” for clarifying the eventual level of tariffs set by Trump. He expressed no worry regarding the IMF’s recent downgrade of U.S. growth projections to 1.8% for 2025, attributing this downgrading to Trump’s tariffs, retaliatory actions, and the resulting uncertainties.
He reiterated his ambition to drive U.S. economic growth, asserting that Trump’s economic policies aim to boost growth to 3% through increased energy production.
Bessent concluded, “I am not worried about the IMF’s predictions. Again, I believe that the third quarter will likely give us clarity on tariffs. We should finalize the tax legislation, and while deregulation has been the slowest element, that should start taking effect in the third and fourth quarters.