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Treasury Secretary Scott Bessent said on Tuesday he expects China to negotiate a trade deal with the Trump administration.
According to Bloomberg, Bessent spoke at a JPMorgan Chase investor event and said the standoff between the U.S. and China on tariffs is not sustainable in the long term. The event was not open to the public, but Bloomberg released a report based on sources present at the meeting.
The S&P 500 rose after Bessent’s indication that a de-escalation of the tariff situation was likely to occur. Bessent’s comments are consistent with President Trump’s statements from last week, in which he expected to reach a good trade deal with China.
The rate of tariffs for products from China is currently set at 145 percent. Bessent has previously pointed out the difference in leverage between the two countries, noting that tariffs imposed by China affect a smaller amount of U.S. imports than those imposed by the U.S. on Chinese goods.
Bessent told investors that the current tariff rates are effectively an embargo between the two countries, but that he anticipates a deal can be made that will start to bring the tariff rates down. However, Bessent also pointed out that negotiations between the U.S. and China have not yet officially begun.
The Trump administration is in the process of working out trade deals with other countries, including Japan, South Korea and India.
Bessent’s comments follow Trump’s previous declaration of a 90-day pause on reciprocal tariffs with other countries, made earlier this month. According to the White House, 75 countries have reached out to the Trump administration to begin a trade negotiation process that could avoid the implementation of reciprocal tariffs.
