G-20 countries should consider more trade barriers with China to cut imbalances, Bessent says
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US Treasury Secretary Scott Bessent made the comments ahead of a meeting with G-20 financial leaders.
PHOTO: AFP
- US Treasury Secretary Scott Bessent urges G-20 countries to reconsider trade policies with China to reduce the country's large trade surplus and encourage economic rebalancing.
- China's economy is weak and relies heavily on exports, which Bessent says is unsustainable and needs to shift towards domestic consumption.
- The US has imposed tariffs and bans on many Chinese exports, pushing China to increase exports to Europe and Latin America, prompting a call for other countries to act.
AI generated
ASHEVILLE, North Carolina – US Treasury Secretary Scott Bessent said on Aug 30 that he will encourage Group of 20 (G-20) members to re-examine their terms of trade with China to shrink global imbalances and press Beijing to rebalance its economy away from exports and towards domestic consumption.
Bessent said in an interview ahead of a G-20 finance leaders’ meeting that the current flood of exports from China was unsustainable, even though the US direct trade position with China was “rapidly improving”.
“The world cannot have a China with a US$1.2 trillion (S$1.53 trillion) trade surplus,” he said. “In China, the economy is quite weak and they are trying to export their way out of it, and they need to rebalance their economy.”
Bessent’s push to mobilise a coordinated trade response to China comes as legal setbacks force the US to rebuild its tariff policy, which had sharply reduced imports from China but led to an influx of Chinese imports elsewhere, especially in Europe and Latin America.
The US has walled off its economy from many Chinese exports with high tariffs and outright bans on some Chinese products, including cars.
Bessent said he told other industrial economies in 2025 they would face pressures from the China import surge and that “now they are confronted with some very stark choices”. He said it will be up to other countries to give China an incentive to shift away from exports and strengthen its chronically weak domestic demand.
“The rest of the world is going to have to examine their terms of trade with China,” he said.
The US is pushing for a G-20 joint statement on reducing trade and current account imbalances.
China’s embassy in Washington could not immediately be reached for comment on its view of the effort.
Tariffs imposed since US President Donald Trump returned to office in 2025 have helped cut the US trade deficit with China for the first six months of 2026 by a third from the same period of 2025, to US$73.9 billion, according to US Census Bureau data.
Some acceleration of Chinese imports occurred in January 2025 as importers tried to beat anticipated tariffs.
Although some economists and European leaders have called for a coordinated effort to strengthen China’s renminbi, Bessent questioned the effectiveness of such a move.
The International Monetary Fund has assessed the renminbi to be undervalued by as much as 21 per cent.
Bessent said suggestions that a new “Plaza Accord” – the 1985 agreement to strengthen currencies against the dollar – would be the answer to reducing imbalances are misguided.
He called it “an easy way to get around dealing with the real trade problem”, which he said was excessive Chinese industrial subsidies and weak domestic demand.
Next US-China summit
Bessent said it was unclear if he would meet his Chinese counterpart, Chinese Vice-Premier He Lifeng, in person ahead of a White House meeting between Trump and Chinese President Xi Jinping slated for late September.
Ahead of the summit, US and Chinese officials will press forward with dialogues on potential tariff reductions on non-strategic goods and artificial intelligence guard rails aimed at keeping powerful AI models from falling into the hands of non-state actors, Bessent said.
“I think that there probably are US$30 billion of non-strategic, non-critical goods on each side that we could take the tariffs off,” he added.
The September summit comes as the US has been rebuilding the tariffs after the US Supreme Court struck down broad duties imposed under an emergency law, including a 20 per cent tariff on Chinese imports.
The Trump administration in July imposed a 12.5 per cent tariff on Chinese imports under an anti-forced labour trade investigation.
It is poised to add more tariffs related to excess industrial capacity under a separate probe.
Bessent said he planned to hold a bilateral meeting during the Asheville G-20 conference with People’s Bank of China governor Pan Gongsheng, but declined to give details. REUTERS