Treasury Secretary Scott Bessent on Monday signaled that a de-escalation of the trade war over President Trump’s harsh tariff rates would have to come from China — not the US.
“I believe that it’s up to China to de-escalate, because they sell five times more to us than we sell to them, and so these 120%, 145% tariffs are unsustainable,” Bessent said during an interview on CNBC’s “Squawk Box.”
Investors and businesses have been hoping for smooth-sailing trade talks that lower rates quickly – especially the stiff 145% tax on Chinese goods, which could hamper complex supply chains across several industries.
Last week, Chinese media reported that Beijing quietly exempted some semiconductors from tariffs, and is considering more exclusions to spare key industries.
But the nation claimed publicly that trade talks with the US haven’t even started yet, while Trump doubled down on his claims that Chinese officials have met with White House counterparts.
Trump’s other tariffs – harsh rates on many nations that have been dropped to 10% for 90 days to give time for negotiations – have stoked fears of reheated inflation and even a possible recession.
Bessent said the US has made progress in its negotiations, specifically calling out India, which accounted for nearly 3% of imported goods to the US as of February, according to Census Bureau data.
“I would guess that India would be one of the first trade deals we would sign. So watch this space,” Bessent said on Monday.
He said that negotiations with other countries will not be taking place in the press.
“We’ve had many countries come forward and present some very good proposals, and we’re evaluating those,” he told CNBC.
He also claimed that European nations are likely “in a panic” over the strength of the euro, which has risen nearly 10% this year against the US dollar after the currencies appeared set for parity in early January.
“You’re going to see the [European Central Bank] start cutting rates to try to get the Euro back down,” Bessent said. “Europeans don’t want a strong euro. We have a strong-dollar policy.”