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US Treasury Secretary Scott Bescent warned on Tuesday that the US-China trade war was “not sustainable” and in comments supporting financial markets that want a trade deal, countries must rule out conflicts.
Bescent told investors at a private meeting hosted by JPMorgan in Washington that he expects Washington and Beijing to reach a deal in “very near future,” according to several people familiar with his comments.
However, several people familiar with the statement said the market responded too optimistically, and that the Treasury Secretary made clear that there were no trade negotiations between Washington and Beijing. Bessent also confirmed that negotiations with China would be a “slog.”
The US and China are in the middle of deepening the trade war after President Donald Trump retaliated by imposing a total tariff of 145% on goods from China and Beijing slapped 125% collection on imports from the US.
“I don’t think the current situation is sustainable at 145 and 125 percent,” Bescent told the conference.
“So I assume there will be a de-escalation in the very near future, and I think it should sigh the world, the market, the relief.
Bessent points out that ship reservations have dropped significantly, adding that “the goal is not to separate.”
Following his remarks, the S&P 500 rose 2.5%, while Nasdaq composites rose 2.7%.
However, many countries have contacted the Trump administration since the president imposed “mutual” tariffs this month, but China and the United States have not held substantial trade talks. Beijing has revealed to the White House that it viewed Trump’s approach as bullying and that it will not surrender.
White House spokesman Caroline Leavitt said he was asked about Bescent’s comments. The president believes his administration is “doing very well on a potential trade deal with China.”
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Later Tuesday, Trump said he would attack the deal with China — something he said repeatedly — and tariffs would “really fall.”
“I think it will work very well,” he told reporters in the oval office.
However, there is no indication that the US and China are about to start negotiations. Trump wants to deal directly with President Xi Jinping, but Beijing doesn’t want to risk telephone calls or meetings until both parties lash out at the outline of the potential trade deals.
