Bessent: China Tariffs Stay Until Reform Begins
Treasury Secretary Scott Bessent stood before the Institute of International Finance this morning and delivered a speech that ought to be remembered as a turning point in U.S. economic diplomacy. While the press zeroed in on his critiques of the IMF and World Bank, what may matter more in the long run was his blunt message to Beijing.
“China needs to change. The country knows it needs to change. Everyone knows it needs to change,” Bessent said. “And we want to help it change—because we need rebalancing too.”
That clarity is what has been missing from U.S. policy for years. Successive administrations made excuses for China’s overcapacity, suppressed wages, and export dependence. Bessent, speaking for the Trump administration, made it clear: this ends now.
“China’s economic system, with growth driven by manufacturing exports, will continue to create even more serious imbalances with its trading partners if the status quo is allowed to continue,” he said.
Bessent confirmed in a meeting with reporters following the speech Wednesday that there has been no unilateral offer from President Trump to lower tariffs on China. This comes one day after Trump told reporters that U.S. tariffs “will come down substantially, but it won’t be zero.” Bessent clarified the point: tariff reductions will not be given away—they must be earned.
And tariffs are just the beginning. Bessent emphasized that the U.S. is weighing broader factors in its China policy, including non-tariff barriers, government subsidies, and regulatory discrimination. This isn’t about playing hardball. It’s about restructuring a global trade relationship that has hollowed out U.S. industry for decades.
China Can No Longer Export Its Way Out of Economic Trouble
“China’s current model,” Bessent warned, “is built on exporting its way out of economic trouble.”
He pointed to Beijing’s policy mix—depressed domestic wages, excess saving, and currency opacity—as forcing the rest of the world to absorb demand shortfalls. “The persistent over-reliance on the United States for demand,” he said, “is resulting in an evermore unbalanced global economy.” Left unchecked, these imbalances make the global system weaker and more vulnerable.
“China can start by moving its economy away from export overcapacity and toward supporting its own consumers and domestic demand,” Bessent said. “Such a shift would help with the global rebalancing that the world desperately needs.”
While critics in the press fret about a lack of engagement, Bessent made it clear that the relationship between Washington and Beijing remains strongest “at the top.” Trump is driving the strategy. The timeline for rebalancing? Two to three years. This isn’t a tweet-cycle trade war. It’s a structural reset of how the U.S. does business.
And it’s already reshaping the global order. According to Bessent, more than 100 countries have approached the U.S. since the tariff announcements to explore rebalanced trade ties. He also noted the U.S. is “very close” to a trade agreement with India—proof that Trump’s approach is building new alliances, not burning bridges.
This moment demands clarity. It’s not tariffs that threaten global stability—it’s the refusal of surplus economies like China to reform a system that’s been unbalanced for decades. Bessent’s remarks make clear that America is no longer going to underwrite a rigged system that saps growth, suppresses wages, and rewards mercantilism.
The world has gotten used to pretending China would rebalance itself. That illusion is over. As Bessent said, the door is open for Beijing to pivot toward consumption and domestic-led growth. But if it doesn’t, the U.S. won’t wait. The correction has already begun.
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