Treasury Secretary Scott Bessent on Wednesday said the Trump administration has an “opportunity for a big deal” on trade between the U.S. and China, providing a hint that a brutal tariff war between the two nations could ease up.
Bessent, who delivered the keynote address at the Institute of International Finance in Washington, D.C., today, said that the Trump administration wants the U.S. economy to rebalance toward more manufacturing, while urging China to shift away from what he called “export-led manufacturing growth.”
“China needs to change. The country knows it needs to change. Everyone knows it needs to change. And we want to help it change — because we need rebalancing too,” Bessent said in the speech.
Beijing’s export-reliant economic model is “unsustainable” and harms both China and the rest of the world, Bessent added. At the same time, the Treasury chief maintained that “America First does not mean America alone,” a comment that comes after the Wall Street Journal reported the Trump administration is considering slashing tariffs on China to de-escalate tensions between the two largest global economies.
The stock market rose sharply on Wednesday following news that the trade war could cool off, and after President Trump said he has no plans to oust Federal Reserve Chair Jerome Powell.
Earlier this month, China hiked its retaliatory tariffs on U.S. goods to 125%, matching the level of tariffs that President Trump has placed on Chinese imports — although those import taxes can rise as high as 145% for some products from China.
Bessent made it clear in his speech that the Trump administration wants to see changes in China’s export-based economy.
“It’s an unsustainable model that is not only harming China but the entire world,” Bessent said in a Washington speech, stressing concerns around trade imbalances that Mr. Trump says he hopes to address through sweeping tariffs.
IMF, World Bank
In the same speech, Bessent also said the International Monetary Fund and World Bank need to be made “fit for purpose” again, and added that both institutions have strayed from their initial missions.
The IMF “has no obligation to lend to countries that fail to implement reforms,” Bessent said. “Economic stability and growth should be the markers of the IMF’s success — not how much money the institution lends out.”
He added that the World Bank should also “no longer expect blank checks for vapid, buzzword-centric marketing accompanied by half-hearted commitments to reform.”
The Associated Press
contributed to this report.
Aimee Picchi is the associate managing editor for CBS MoneyWatch, where she covers business and personal finance. She previously worked at Bloomberg News and has written for national news outlets including USA Today and Consumer Reports.
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