U.S. Treasury Secretary Scott Bessent said Tuesday that the ongoing trade standoff between the United States and China is "not sustainable," signaling that a de-escalation could be imminent even as formal negotiations have yet to begin. Speaking at a closed-door investor summit hosted by JPMorgan Chase in Washington, Bessent told attendees that both sides understand the current impasse cannot continue indefinitely.
"I do say China is going to be a slog in terms of the negotiations," Bessent said, according to a transcript obtained by the Associated Press. "Neither side thinks the status quo is sustainable." The remarks, which Bloomberg first reported, triggered a brief rally in equities, with the S&P 500 index climbing on renewed hopes of a breakthrough.
The U.S. and China are locked in a tariff battle that has pushed import duties to extraordinary levels-145% on Chinese goods and 125% on American exports-effectively freezing bilateral trade flows between the world's two largest economies. While Bessent expressed optimism that a deal could eventually be reached, he acknowledged that negotiations with Beijing had yet to formally commence.
President Donald Trump has been simultaneously pursuing one-on-one agreements with dozens of other trading partners, pausing planned tariffs on most countries for 90 days starting April 9, except for China. Despite the administration's aggressive tariff strategy, which it has described as "reciprocal," markets have grown increasingly nervous over global supply chain disruptions, rising consumer costs, and a potential slowdown in economic growth.
White House press secretary Karoline Leavitt said Tuesday that Trump told her "we're doing very well" on a "potential trade deal with China," though she did not confirm whether direct talks with Chinese President Xi Jinping are scheduled. Leavitt added that the administration had received 18 trade proposals from foreign governments since the tariff policy went into effect.
The Chinese government issued a pointed warning Monday against any country seeking favorable terms from Washington at Beijing's expense. "China firmly opposes any party reaching a deal at the expense of China's interests," the Commerce Ministry said in a statement. "If this happens, China will never accept it and will resolutely take countermeasures in a reciprocal manner."
The ministry criticized the broader U.S. strategy of pushing trading partners into "reciprocal tariffs" under what it called an abuse of the principle of equivalence. "Sacrificing the interests of others in exchange for so-called exemptions is like seeking the skin from a tiger," the statement read. "It will ultimately only fail on both ends."
Bessent's comments come during the International Monetary Fund and World Bank's spring meetings in Washington, where finance ministers and global bankers are weighing the impact of Trump's sweeping trade policies. The White House has maintained that the tariffs are essential to rebalance decades of trade deficits and revive American manufacturing. However, the uncertainty has led to volatility in financial markets, with interest rates on U.S. debt climbing and equity markets struggling to recover.
Adding to investor unease, Trump has continued to criticize the Federal Reserve for not lowering interest rates. He has publicly floated the possibility of firing Fed Chair Jerome Powell, accusing the central bank of acting "in the name of politics, rather in the name of what's right for the American economy," according to Leavitt.
