US Treasury Secretary Scott Bessent on Monday said there’s a “big deal to be done” with China, suggesting that despite rising tensions, the two global economic giants could eventually reach a breakthrough in their trade war.
“There doesn’t have to be [decoupling], but there could be,” Bessent told Bloomberg TV when asked about the possibility of economic separation between the US and China.
He emphasized the complexity of any potential agreement, noting that China is both America’s biggest economic competitor and its top military rival.
A War of Tariffs
The US-China trade war has intensified since Donald Trump launched a sweeping global tariff campaign, primarily aimed at Chinese imports. The result? A spiraling series of tit-for-tat tariff hikes:
- US tariffs on Chinese goods have reached up to 145%
- China’s retaliatory tariffs have hit 125% on American imports
Despite the tough stance, Bessent admitted that such levels are “not sustainable” and warned that these numbers are “not a joke.”
Tech Exemptions — But Only for Now
Recently, the White House seemed to offer some relief by announcing tariff exemptions on high-demand electronics like smartphones, laptops, and semiconductors—most of which are sourced from China.
However, Trump later clarified on Truth Social that the exemptions are temporary:
“NOBODY is getting ‘off the hook’… especially not China which, by far, treats us the worst!”
China Responds: “Trade War Helps No One”
Chinese President Xi Jinping, who began a Southeast Asia tour in Vietnam, issued a sharp rebuke against US protectionist policies. In a meeting with Vietnamese leader To Lam, Xi warned:
“Protectionism will lead nowhere… A trade war will produce no winner.”
He called for global cooperation and the defense of a stable free trade system and supply chains.
Deal Still Possible?
The White House says Trump is still optimistic about sealing a trade deal with China, though officials believe Beijing must make the first move.
Yet, as the trade war continues, fears of a global economic downturn are mounting. The US dollar is falling, and investors are backing away from government bonds, which are usually considered safe bets.
