Treasury Secretary Scott Bessent told investors in a closed-door meeting Tuesday he expects “there will be a de-escalation” in President Donald Trump’s trade war with China in the “very near future,” a person in the room told CNBC.
“No one thinks the current status quo is sustainable” with tariff rates at their current levels, Bessent said at a private investor summit in Washington, D.C., hosted by JPMorgan Chase.
Stocks, already recovering from the prior day’s sell-off, soared higher after Bessent’s remarks were first reported.
Bessent said he believes that the prospect of de-escalation between the economic superpowers “should give the world, the markets, a sigh of relief,” according to the person in the room who was granted anonymity in order to describe a private event.
“We have an embargo now, on both sides, right?” he said.
Bessent also insisted that, despite the U.S. ratcheting up tariffs on Chinese imports to 145% and China retaliating with 125% duties on American goods, the goal of Trump’s policy “isn’t to decouple.”
The U.S. Cabinet secretary noted that negotiating with China is likely to be “a slog.”
But neither side “thinks the status quo is sustainable,” Bessent added.
Later Tuesday, White House press secretary Karoline Leavitt echoed Bessent’s positive outlook toward talks with China, though neither official suggested that those negotiations have actually begun.
Leavitt said in a press briefing that Trump wants people to know that “we’re doing very well in respect to a potential trade deal with China.”
Trump is “setting the stage for a deal with China,” she said, “and the ball is moving in the right direction.”
Asked if Trump has spoken directly with Chinese President Xi Jinping, Leavitt said she had nothing to share.