US, China tariffs both need to fall for trade talks to start, Treasury’s Bessent says

WASHINGTON – US Treasury Secretary Scott Bessent on April 23 said he believes excessively high tariffs between the US and China will have to come down before trade negotiations can proceed, but added that President Donald Trump would not unilaterally cut tariffs on Chinese imports.

Mr Bessent told reporters on the sidelines of International Monetary Fund (IMF) and World Bank annual meetings that de-escalation was necessary for the world’s two largest economies to rebalance their trading relationship.

Asked whether that meant a reduction in

the 145 per cent US tariffs

on Chinese goods and China’s 125 per cent tariffs on US goods, he said: “I think that has to be, because again, neither side believes that these are sustainable levels. As I said yesterday, this is the equivalent of an embargo and a break between the two countries in trade does not suit anyone’s interest.”

He also said there were no plans for Mr Trump to move first in lowering tariffs to de-escalate a bitter US-China trade war, echoing comments from White House spokeswoman Karoline Leavitt that there would be “no unilateral reduction in tariffs against China”.

“I would not be surprised if they went down in a mutual way,” Mr Bessent added.

He said the Trump administration was working to restore tariff certainty through negotiations with dozens of countries, and he did not think it would involve an “extended process”, because countries will want to avoid the higher reciprocal tariffs that were announced on April 2.

Mr Bessent also clarified previous remarks about a two- to three-year timeline for a US-China deal, saying this referred to the full rebalancing process, not the negotiations for a deal, which should happen much faster.

He said earlier that it was time for China to rebalance its economy towards consumption, and called for a joint rebalancing, with the US shifting towards manufacturing.

He said the third quarter of 2025 is a “reasonable estimate” for achieving clarity on the ultimate level of Mr Trump’s tariffs. He added that he was not concerned about

the IMF’s steep US growth downgrade

by nearly a full percentage point to 1.8 per cent for 2025, a cut due largely to Mr Trump’s tariffs, retaliation and the uncertainty they are causing.

Mr Bessent has set a goal for pushing US growth and argued that Mr Trump’s economic policies would propel growth up to 3 per cent through more energy production. “I’m not concerned about the IMF projections. And again, I think the third quarter would probably be a reasonable estimate that we will have clarity on tariffs,” he said.

“We will have the tax Bill done, and I would think that the deregulation, as I mentioned, was always going to be the slowest component, but that should start kicking in in the third and fourth quarters.”

Negotiations elsewhere

Mr Bessent said talks with other countries were continuing, and that a deal with India was “very close”. The talks with India were easier because its trade barriers were mostly high tariffs, with “no currency manipulation” and fewer complex non-tariff trade barriers, he added.

India and China are among the roughly 15 largest US trading relationships that the Trump administration is prioritising for negotiations aimed at reducing the US trade deficit.

“I don’t think that the economy will rise and fall off of the Bahamas and Costa Rica negotiations,” Mr Bessent said.

Regarding talks with the European Union, Mr Bessent said digital services taxes in countries such as France and Italy aimed at US technology platforms were a problem the US wants to incorporate into negotiations.

Talks with Japan would include factors such as “tariffs, non-tariff trade barriers, currency manipulation and government subsidy of labour and fixed capital investment”, he said, but would not include specific targets for the dollar-yen exchange rate. REUTERS