Treasury Secretary Bessent: We Have the Opportunity for a "Beautiful Rebalancing" of Trade With China; Tariffs Could be Lowered to 50-65%

Those tariffs are still beastly for China.

Trump talked about cutting the tariffs "substantially" down from the current 145% level.

US President Donald Trump has signaled a potential U-turn on his trade war with China amid continued market volatility, saying the high tariffs on Chinese goods will "come down substantially, but it won't be zero."

Trump's remarks, made at a White House news event Tuesday, appear to mark a rhetorical climbdown after weeks of tough posturing and tit-for-tat retaliation that sent tariffs on China beyond a staggering 145%.

"145% is very high and it won't be that high," Trump said in a question-and-answer session with reporters in the Oval Office. "It won't be anywhere near that high. It'll come down substantially. But it won't be zero."

Trump made the comments when asked about Treasury Secretary Scott Bessent's remarks earlier in the day that the high tariff rates between the United States and China have effectively embargoed trade between the economies.

Bessent said at a private investment conference hosted by JP Morgan Chase that the trade war with China is unsustainable and he expects the battle to de-escalate in the very near future, a person familiar with the matter confirmed to CNN.

Instead of a hard break or complete decoupling between the United States and China, Bessent told investors that the goal is to have a rebalancing of trade, the source told CNN.

...

Trump's shift in tone also went viral on the Chinese internet. On Wednesday, the hashtag "Trump chickened out" was trending as a top topic on social media platform Weibo, racking up more than 150 million views.

This is CNN so of course they're promoting Chinese communist propaganda about the US president.

China insists it's not even negotiating with China, and won't negotiate until Trump cancels all tariffs on China.

Trump rejects that, for obvious reasons.

China has called on the US to cancel its sweeping tariffs on Chinese goods entering the country as a sign that the President Donald Trump is serious about resolving the trade war between the two countries.

A Chinese official said there had been no trade talks with the US, despite suggestions otherwise from the Trump administration.

The trade war between the world's two largest economies has been escalating, with China sending back Boeing planes it ordered from the US in its latest retaliation over tariffs.

But Trump has appeared to soften his stance on China, saying that the taxes he has so far imposed on Chinese imports would "come down substantially, but it won't be zero".

A trade war between China and the US is in full swing, with Trump imposing import taxes of up to 145% on Chinese goods coming into the US, and China hitting back with a 125% tax on American products.

In one of China's strongest statements yet over the tariff war, Commerce Ministry spokesman He Yadong said the US should remove all "unilateral tariff measures" against China "if it truly wanted" to solve the issue.

"The person who tied the bell must untie it," he added.

Separately, Foreign Ministry spokesman Guo Jiakun said China and the US had "not conducted consultations or negotiations on tariffs, let alone reached an agreement".

He added that reports to the contrary were "false".

Trump previously said negotiations between the countries were "active" - but this was also contradicted by US Treasury Secretary Scott Bessent, who said on Wednesday they had not yet begun.

Bessent added that there was an opportunity for a "big deal" between the US and China on trade.

He has previously said he expected a de-escalation of the "unsustainable" trade war, and said the current situation was "not a joke".
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Trump said on Tuesday that he would be "very nice" in negotiations with Beijing in the hope of securing a trade deal.

But following China's latest comments, he said on his Truth Social media platform "Boeing should default China for not taking the beautifully finished planes that China committed to purchase".

"This is just a small example of what China has done to the USA, for years," he added, before repeating accusations that synthetic opioid fentanyl "continues to pour into our country from China, through Mexico and Canada, killing hundreds of thousands of our people".

The boss of plane manufacturer Boeing revealed China had sent back aircraft it had ordered from the US as part of its retaliation to tariffs.

Treasury Secretary Bessent seems to believe China will negotiate.

Treasury Secretary Scott Bessent said there is "an incredible opportunity" for the US and China to achieve what he terms a "beautiful rebalancing" on Wednesday, at an event held by the Institute of International Finance Treasury.

Bessent spoke more about his call for a course correction for the International Monetary Fund and World Bank and the "back to basics" approach Trump wants for the international economic order.

"The U.S. does not have a revenue problem. We have a spending problem," Bessent told Tim Adams, president and CEO of the Institute of International Finance (IIF) Global Outlook Forum.

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[BESSENT:] Alternatively, what I have said previously, there is an opportunity for a big deal here that the U.S. is looking to rebalance to more manufacturing. The identity of that would be less consumption. If China is serious, on less dependence on export-led manufacturing growth and a rebalancing toward a domestic economy. I think they use the term dual circulation. Well, it's right now it's really singular circulation. And if they want to rebalance, let's do it together. This is an incredible opportunity. And I think if the Bridgewater founder, Ray Dalio, were to write something, he could call it a beautiful rebalancing indeed.

Bessent agrees that one factor driving our trade deficits are our budget deficits -- we're always printing and spending more money than we have, which creates a "demand suck" bringing in imports.

He also talks about the dollar's position as the world's reserve currency driving up the value of the dollar and therefore raising the prices of US exports as well as creating that "demand suck" for foreign imports. See the link for that. (He doesn't want to give up the dollar's position as reserve currency.)

ADAMS: So you're already taking on the task of China, more consumption, less investment, dealing with their manufacturing excess capacity. Europe's a great opportunity, the U.S. rebalancing here, including on fiscal. So what do you want the IMF to do? What would you like to hear from Kristalina over the next couple of days or the board in a new direction? Again, back to factory settings direction. What do you want to hear from them?

BESSENT: Well, again, I think it's just been mission creep. And occasionally you have to trim your garden when the weeds grow. And I think that it's back to basics. What are our priorities and how are we going to judge success? And the World Bank, you discussed about graduating the medium-sized countries that should have graduated some time ago, that changes the commercial model of the World Bank. But obviously, you think that's important. They need to be graduated.

This is a good point:

ADAMS: Yes. I mean, it's just as President Trump says, it's common sense that you can't have the second largest economy in the world and... I applaud their rapid growth, but you don't get both. It's like the teenager who sometimes wants to be treated like a child, sometimes wants to be treated like an adult. And I got one of those, too. And it's an adult economy.

He means that small economies routinely have big trade surpluses (relative to their tiny size, I mean), but large economies tend to be more balanced as internal consumption catches up with exports for foreign markets. But China is manipulating things to keep pumping out exports like an undeveloped country while actually having the world's second-biggest economy.

I can't find a print article stating this, but Megyn Kelly claims that Trump is considering a cutting the tariffs to 50 or 65%. He also floated a scheme in which imports that don't threaten national security will be taxed at 35%, while those that do will be taxed at 100%.

posted by Ace at 04:25 PM

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