U.S.-China tariffs are inherently unsustainable, according to Bessent's perspective.
Here's a revised, fresh take on the article:
- Reuters, WASHINGTON
In a surprise move, US Secretary of the Treasury, Scott Bessent, hinted at a potential de-escalation in the ongoing trade war between the US and China. The world's two largest economies have been locked in a tariff battle that's raised concerns about a possible recession.
The hefty tariffs – a staggering 145% on Chinese products and 125% on US goods – might not be long-lived, as per Bessent. However, he swiftly added that such reductions wouldn't happen unilaterally by Trump.
"Neither side considers these tariff levels as sustainable. This is essentially like an embargo – a trade disruption between us doesn't serve anyone's interest," Bessent shared in a press meet.
The White House has shown a willingness to lower tariffs on Chinese imports to fuel negotiations with Beijing, but only in collaboration, as suggested by a reliable source close to the discussions. However, the White House is tight-lipped about the exact percentage they'd accept. Preliminary reports hint at a possible rate cut as low as 50%.
A White House spokesperson refused to comment on the speculations, stating that any tariff-related news would come directly from Trump himself.
While speaking to reporters, Trump stated, "We aim to secure a fair deal with China." Yet, he didn't provide specific details.
Even if the proposed tariff levels in the Wall Street Journal report were applied, they would still be steep enough to significantly impact trade between the two economies. German shipper Hapag-Lloyd reported that a third of its US-bound shipments from China have been canceled due to the tariff uncertainty.
Meanwhile, both nations have been unable to reach an agreement on curbing the fentanyl crisis.
The apparent US softening on China tariffs brought relief to markets that have taken a beating due to Trump's trade policies. The S&P 500 surged by 2.11% in midday trading, but still falls 12% short of its February record close.
Jim Baird, chief investment officer at Plante Moran Financial Advisors, said, "The markets are riding the waves of political and economic uncertainties."
Bessent believes that there might be clarity on the ultimate level of tariffs by the third quarter of this year. Besides the steep tariffs on China, Trump has also imposed a comprehensive 10% tariff on all other US imports and levied higher duties on steel, aluminum, and automobiles. He has delayed targeted tariffs on several other countries until July 9 and hinted at additional industry-specific taxes on pharmaceuticals and semiconductors. This uncertainty has shaken financial markets and stirred recession fears.
In response to Trump's 20% tariff threats against the EU, European Commissioner for Trade, Valdis Dombrovskis, revealed that the trade bloc is ready to purchase more liquid natural gas from the US and cut tariffs on certain goods, should a deal be reached before the July 9 deadline. However, if no agreement is reached, the EU would retaliate with countertariffs, according to Dombrovskis.
- The potential de-escalation in the US-China trade war, as hinted by US Secretary of the Treasury Scott Bessent, is likely to be welcomed by both business and general-news outlets, given the concerns about the tariff battle contributing to a possible recession.
- The suggested tariff reductions, which could be as low as 50%, are likely to serve as a benchmark for future negotiations between the US and China, as both sides have reportedly shown a willingness to collaborate in order to fuel trade negotiations.
- The finance sector is likely to closely monitor the political climate, particularly regarding tariffs, as the progress (or lack thereof) in trade negotiations between the US and China can have significant effects on stock markets and economies worldwide.
- The apparent US softening on China tariffs has likely broken the general trend of increasing tariffs set by President Trump, and it could serve as a benchmark for potential negotiations with other countries, such as the EU, whose trade relations might also be impacted by tariffs.
