Treasury Secretary Scott Bessent said Tuesday the Trump administration will take into account China’s lack of compliance with a trade deal from the president’s first term when it finalizes a new trade deal.
Bessent was interviewed on FOX Business Network’s “Kudlow” after President Donald Trump raised tariffs on Chinese imports to upward of 145%, prompting China to slap 125% tariffs on U.S. exports to the country.
Host Larry Kudlow asked whether the phase one trade deal with China from 2020, which was agreed upon to end the U.S. trade war with China at that time, could be used as a starting point or if the administration will take on negotiations with a fresh start.
“I think we’ll have to take into account that they didn’t adhere to the phase one deal and, you know, I note with great interest that the Biden administration liked the tariffs, but they didn’t enforce the purchase agreements,” Bessent said.
CHINA CAVES ON 125% TARIFF FOR MAJOR US EXPORT AFTER WHITE HOUSE PREDICTS BEIJING CAN’T KEEP UP
The “phase one” trade deal signed in January 2020 stipulated China would buy an additional $200 billion in U.S. exports over 2020 and 2021, though it fell well short of those levels and was unable to import enough from the U.S. to meet its pre-trade war import levels from 2017.
The phase one trade deal also featured other agreements, such as China committing to remove technical barriers to U.S. agricultural exports, protecting the intellectual property rights of U.S. firms and ending forced technology transfers.
“Since then, over the past four years, trade has not gotten fairer with China,” Bessent added. “President Trump believes that economic security is national security. And we got a beta test for that during COVID, when I think Americans were shocked to see the vulnerability of the supply chain for such strategic things as medicines, as semiconductors, steel. So, one of the most important things that we will be doing over the coming years is fortifying the supply chain.”
US TARIFFS COULD COST CHINA 5-10 MILLION JOBS, ‘ONUS’ ON BEIJING, BESSENT SAYS
Bessent reiterated he thinks the tariffs on China, one of the three largest U.S. trading partners, aren’t sustainable, and the two sides will eventually come to an agreement on easing them.
“As I’ve said many times, I think these high tariffs are unsustainable. I believe that U.S. buyers did a substantial amount of preordering, and now the factories in China are having to shut down. And I’ve seen some very large estimates of potential worker layoffs if these tariffs stay in place,” Bessent said.
He added that “we have a deficit with them. Surplus country always suffers more, and they sell us roughly five times more than we sell them.”
Kudlow asked the treasury secretary whether there is any progress in negotiations with China over a trade deal to ease tariffs.
Bessent deferred to President Trump, saying the president is going to be involved with all the trade negotiations. So, he will wait to let him announce those deals.
