US Secretary of the Treasury Scott Bessent on Wednesday said that high tariffs between the US and China are not sustainable, as US President Donald Trump’s administration signaled openness to de-escalating a trade war between the world’s two largest economies that has raised fears of recession.
The tariffs — 145 percent on Chinese products and 125 percent on US products — would have to come down before trade talks can proceed, Bessent said, but added that Trump would not make that move unilaterally.
“Neither side believes that these are sustainable levels. As I said yesterday, this is the equivalent of an embargo and a break between the two countries in trade does not suit anyone’s interest,” Bessent said.
Photo: AFP
The White House is open to discussing a significant rate cut on Chinese imports to advance negotiations with Beijing, but would not do so alone, a person familiar with the conversations said.
That person would not say how low the White House might be willing to go, but the Wall Street Journal reported the figure could be as low as 50 percent.
A White House spokesperson dismissed the reports as “pure speculation,” and said news on tariffs would come from Trump himself.
“We are going to have a fair deal with China,” Trump said, but did not outline any specifics.
The tariff levels outlined in the Wall Street Journal report would likely still be high enough to deter a significant chunk of trade between the world’s two largest economies.
German shipper Hapag-Lloyd on Wednesday said that 30 percent of its US-bound shipments from China have been canceled.
Separate talks between China and the US over tackling the fentanyl epidemic have not yielded results so far, sources said.
The apparent US softening on China tariffs was a welcome sign for markets battered by Trump’s trade policies. The benchmark S&P 500 was up 2.11 percent in midday trading, but was still more than 12 percent below its February record close.
“It’s about all of the political and policy uncertainty and what it could mean for the economy in the near term,” Plante Moran Financial Advisors chief investment officer Jim Baird said.
Bessent said the third quarter of this year is a “reasonable estimate” for achieving clarity on the ultimate level of Trump’s tariffs.
In addition to the steep tariffs on China, Trump has also imposed a blanket 10 percent tariff on all other US imports and higher duties on steel, aluminum and autos. He has suspended targeted tariffs on dozens of other countries until July 9 and floated additional industry-specific levies on pharmaceuticals and semiconductors. That has roiled financial markets and raised fears of recession.
The EU, which Trump has threatened with 20 percent tariffs, would respond with countertariffs if it cannot reach a deal with the US before the July 9 deadline, European Commissioner for Trade Valdis Dombrovskis said on Wednesday.
The 27-member trade bloc has offered to buy more liquid natural gas from the US and reduce tariffs on some goods, he added.
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