Scott Bessent expects US-China trade de-escalation soon, calls current tariffs unsustainable: Report

Bessent recently visited Buenos Aires to reaffirm U.S. backing for Argentina’s IMF-backed $20 billion economic reform program.

U.S. Treasury Secretary Scott Bessent believes that a de-escalation in trade tensions between the United States and China is imminent, even though formal negotiations have not yet begun. According to a source familiar with Bessent’s remarks at a closed-door JP Morgan investment conference in Washington, he described the ongoing tariff standoff as “a two-way embargo” and said neither country considers the current state of affairs sustainable.

Speaking on the sidelines of the IMF and World Bank Spring Meetings, Bessent reportedly downplayed the notion of economic decoupling, emphasising that the Trump administration's aim is a “big, beautiful rebalancing,” with China pivoting toward greater consumption and the U.S. boosting domestic manufacturing. However, he acknowledged uncertainty over whether Beijing is prepared to make such a shift.

Bessent’s comments, first reported by Bloomberg and corroborated by a source who attended the meeting, noted that the current tariff regime, 145 percent duties on Chinese imports and 125 percent retaliatory tariffs on American goods, could soon be eased, potentially bringing “a sigh of relief” to financial markets.

Markets reacted positively to Bessent’s tone, with major U.S. indexes climbing more than 2 percent Tuesday afternoon. The recovery followed Monday’s selloff, which was driven by President Donald Trump’s critical remarks about Federal Reserve Chair Jerome Powell.

In addition to U.S.-China trade, Bessent also commented on Argentina’s economic situation. He suggested that Washington may offer financial support to the South American country in the event of a global shock, as long as President Javier Milei’s government maintains its reform agenda and external factors, not domestic policy failures, are to blame for any setbacks.

Bessent recently visited Buenos Aires to reaffirm U.S. backing for Argentina’s IMF-backed $20 billion economic reform program.

(With inputs from Reuters)