Scott Bessent expects de-escalation in U.S.-China trade war
- Scott Bessent addressed an investor summit in Washington, D.C., on April 22, 2025, stating that the trade war between the U.S. and China is unsustainable.
- He expects a de-escalation in tensions, noting both countries are aware their current tariff levels cannot remain in place.
- Bessent's comments have resulted in a positive market response, with significant upticks in stock values.
In Washington, D.C., U.S. Treasury Secretary Scott Bessent addressed an investor summit hosted by JPMorgan Chase on April 22, 2025. Bessent stated that the ongoing tariffs between the United States and China are unsustainable for both economies, emphasizing that a de-escalation of tensions is expected in the 'very near future'. Both nations have implemented high tariffs on each other's goods, with the U.S. imposing a 145% tariff on Chinese imports, while China retaliated with 125% duties on American products. Bessent acknowledged that negotiations are yet to formally start, but he believes that both sides understand the current situation cannot remain unchanged. The stock market responded positively to Bessent’s remarks, with significant gains observed following the announcement. Investors were heartened by the prospect of easing trade tensions, which had been contributing to market volatility and economic uncertainty. Moreover, Bessent noted that high tariffs have already impacted economic growth and increased inflationary pressures. Amid the backdrop of elevated tariffs and heightened regulatory scrutiny against Chinese companies, concerns over a forced delisting of Chinese stocks from U.S. exchanges have also emerged, further complicating the financial landscape. Despite the positive outlook presented by Bessent, he warned that achieving a comprehensive trade deal will take time due to the complexity of negotiations. The Trump administration's approach includes efforts to engage with various global trading partners as part of a broader strategy aimed at reducing trade imbalances. As discussions continue, both the United States and China have signaled a willingness to reevaluate their positions, suggesting that a compromise could be possible. The ongoing trade war has affected various sectors and led to a significant slowdown in economic activity, prompting calls from market analysts for swift resolutions. With the uncertainty surrounding tariffs, investors are closely monitoring developments that could affect market stability. Overall, many stakeholders continue to advocate for a balanced approach that considers both nations' interests while aiming for a mutually beneficial and sustainable economic relationship.