United States Treasury Secretary Scott Bessent owned that the trade tensions between the U.S. and China are unsustainable and can’t persist indefinitely. However, negotiations are likely to be a “slog.”
At a closed-door investor summit for JP Morgan in Washington on Tuesday, the nation’s premier financial policy lead said that America and China have effectively entered into a trade “embargo,” with triple-digit duties on both sides hindering the free flow of goods that consumers have become accustomed to.
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That’s spelled bad news for Wall Street in recent weeks and sent tremors throughout the global economy, and Bessent acknowledged that the situation cannot continue to drag on, according to a report from Bloomberg that cited sources who heard the Treasury Secretary’s remarks. He told attendees at the meeting that the standoff would likely come to an end soon and that he is optimistic a deal can be reached—though those negotiations haven’t yet begun, he admitted.
Bessent said the goal isn’t to completely de-couple from China but to rebalance the trade relationship, with the U.S. bolstering its own manufacturing capabilities and capacity and taking in less from the sourcing superpower.
But while President Donald Trump seems bullish that a trade deal can be reached in the next three to four weeks, as he told reporters last Thursday, Bessent told attendees at Tuesday’s conference that if the two countries can reach a larger trade agreement in the next two to three years, that would constitute a major win.
American corporations that do business in China aren’t likely to be buoyed by Bessent’s timeline as they contend with potential price increases and shifts in sourcing due to the tariff turmoil.
Leaders from major U.S. retailers including Walmart, Home Depot, Lowe’s and Target met with President Trump on Monday to discuss their concerns about the universal baseline tariffs and reciprocal duties the administration has levied on trade partners across the globe.
Little has been reported about the discussion, though Walmart and Target both released statements calling the meeting “productive” with the former saying it appreciated the opportunity to share insights with the president and the latter saying it valued the chance to meet with retail peers to discuss a path forward on trade.