Treasury Secretary Scott Bessent said Tuesday the U.S. holds a substantial advantage over China as the two nations exchange threats in a burgeoning trade war.
“I think it was a big mistake, this Chinese escalation, because they’re playing with a pair of twos,” Bessent said during an interview on CNBC’s “Squawk Box.” “What do we lose by the Chinese raising tariffs on us? We export one-fifth to them of what they export to us, so that is a losing hand for them.”
The comments come a day ahead of the U.S. raising its duties on China and dozens of other nations as part of so-called reciprocal tariffs whose purpose, Bessent said, is to bring trading partners to the negotiating table and jobs back to the U.S.
So far, he said Japan has been at the forefront of countries eager to negotiate, and the White House expects a multitude of others.
“I think you are going to see some very large countries with large trade deficits come forward very quickly,” Bessent said. “If they come to the table with solid proposals, I think we can end up with some good deals.”
Ultimately, the hope would be to generate both jobs and revenue from the tariffs, he added.
“If we put up a tariff wall, the ultimate goal would be to bring jobs back to the U.S. But in the meantime, we will be collecting substantial tariffs,” Bessent said. “If we’re successful, tariffs would be a melting ice cube, in a way, because you’re taking in the revenues as the manufacturing facilities are built in the U.S., and there should be some level of symmetry between the taxes we begin taking in with the new industry from the payroll taxes as the tariffs decline.”
While he said some 70 countries have reached out to the White House to begin talks, China has vowed it will “fight to the end” and has imposed 34% tariffs on U.S. products.
In return, President Donald Trump said he will slap another 50% charge on Chinese imports if the tariff is not withdrawn. The U.S. in 2024 ran a nearly $300 billion trade deficit with China, or about one-third of the entire imbalance.
With the tariffs, Trump is hoping to open up more markets for American products and reshore manufacturing operations to the U.S. However, the administration is not simply focusing on absolute tariff levels from other nations but rather nontariff barriers such as currency manipulation, Europe’s value-added tax and other methods the White House says undermine fair trade.
“Everything is on the table,” Bessent said. “The academic literature shows that it’s actually the nontariff barriers which are harder, both harder to quantify and … they’re more insidious because they’re hidden, they’re obfuscated.”
Stock market futures, which already had been indicating a strong open on Wall Street, added to gains after Bessent spoke.
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