US Treasury Secretary Bessent: Everyone should take a deep breath regarding markets

US Treasury Secretary Bessent: Everyone should take a deep breath regarding markets

US Treasury Secretary Signals Renewed Pressure on China Over Trade and Tariffs

U.S. Treasury Secretary Bessent has outlined a renewed push to address trade imbalances with China, calling for immediate action to prevent further strain on the global economy.

Bessent warned that if international holiday orders are not placed soon, it could have severe consequences for China’s economy. He pointed to a noticeable slowdown in China’s economic activity, suggesting the country may soon need to revisit the Phase 1 trade deal originally negotiated under President Trump.

Bessent stressed that reducing high Chinese tariffs must be a priority, describing them as a barrier to fair trade. "We intend to dismantle China’s unfair trade practices and ensure they honor the commitments they’ve previously made," he said.

Calling for a de-escalation in the ongoing tariff tensions, Bessent emphasized that both nations need to work toward rebalancing their economic relationship. “If the U.S. and China can rebalance together, that would be a major breakthrough,” he said, while also cautioning that resolving the issue will require a step-by-step approach.

The remarks signal a clear intent from the U.S. to hold China accountable while seeking a more stable and cooperative trade environment.

Treasury Secretary Bessent Signals Confidence in U.S. Economy, Urges Rate Cuts Amid Global Trade Tensions

Bessent stated that current U.S. policies are working to bring down inflation, and highlighted strong household consumption as a key sign of economic resilience. He also noted that the economy performed well in the first quarter of the year and expects that initial GDP figures may be revised upward as more data becomes available.

Addressing the bond market, Bessent pointed out that the current inversion—where two-year yields are below ten-year yields—indicates the Federal Reserve should consider cutting interest rates to support continued growth.

He also suggested that recent signs of GDP decline may be linked to an increase in inventory stocking of imported goods, and expects future economic data to reflect adjustments in these trends.

Overall, Bessent expressed confidence in the U.S. economic outlook while maintaining pressure on China to address ongoing trade imbalances.