- Treasury Secretary Scott Bessent tried to put a finer point on the Trump administration’s goals in its tariff talks with Beijing. While the U.S. wants to avoid a “generalized decoupling” from China, it still seeks to decouple for “strategic necessities,” he told CNBC. Meanwhile, the U.S. slashed its duties on China to 30% from 145%, and China cut its retaliatory levies to 10% from 125%.
The world’s two largest economies shouldn’t totally cut themselves off from each other, but the U.S. still needs self-sufficiency in key areas, according to Treasury Secretary Scott Bessent.
After concluding an initial round of tariff talks with Beijing over the weekend that resulted in duties from both sides coming down drastically for 90 days, he sought to put a finer point on the Trump administration’s goals.
Speaking in Geneva, Switzerland, on Sunday immediately following negotiations with his Chinese counterparts, Bessent said “neither side wants to decouple.” But he later clarified that some decoupling is desired.
“We do not want a generalized decoupling from China. But what we do want is a decoupling for strategic necessities, which we were unable to obtain during COVID,” Bessent told CNBC on Monday, alluding to America’s reliance on Chinese medical supplies during the pandemic. “And we realized that efficient supply chains were not resilient supply chains.”
That means protecting the steel industry as well as sources of “critical medicines” and semiconductors, he added.
In fact, separate U.S. tariffs on imported steel, aluminum and autos will remain in place—on China as well as most other trading partners. President Donald Trump has also threatened tariffs on pharmaceuticals and chips.
Last month, he put a temporary hold on “reciprocal” tariffs that applied to individual countries, but it doesn’t apply to industry tariffs. On Monday, Bessent emphasized that point when it comes to China, saying “the reciprocal tariffs have nothing to do with the specific industry tariffs.”
In addition, a 20% U.S. tariff on China that’s predicated on its role as a source of fentanyl-related supplies also remains in place.
That means Trump’s tariffs on China are coming down to 30% from 145% for 90 days, while China is cutting its retaliatory levies to 10% from 125%.
Both countries also agreed to create a “consultation mechanism” for future discussions on trade and economic issues. Trump said Monday that tariffs on China will go up again if a long-term deal isn’t reached, but they won’t go all the way to 145%.
Meanwhile, Bessent told CNBC that during the 90-day period, the two sides will also work on non-tariff trade barriers, adding that the U.S. seeks to open up China’s economy further to give American businesses greater access.
“I would imagine that in the next few weeks we will be meeting again to get rolling on a more fulsome agreement,” he predicted.
