Bessent: China Seeks De-Escalation as Talks with U.S. Continue

The U.S. and China Despite public statements from the Chinese government, Treasury Secretary Scott Bessent said Sunday that they are discussing crucial economic issues.

Why it matters: The economic conflict between the globe's top two biggest trading nations threatens The overall global system is under scrutiny, yet considerable debate exists regarding whether genuine advancements towards a solution are being made.

What they're saying: In an appearance on ABC's "This Week," Bessent highlighted that many of the globe’s prominent economic leaders were in Washington last week for the IMF and World Bank spring gatherings.

• "I engaged with my Chinese colleague, primarily discussing conventional topics such as fiscal stability and global economic alerts. It remains unclear whether Presidents Trump and Xi have communicated directly," Bessent stated.
• When asked about China's strong refutations regarding any discussions, Bessent stated, "I believe they are catering to a distinct crowd."

Catch up quick: Over the past week, President Trump repeatedly insisted His government was discussing trade matters with China, despite denials from the Chinese side.

• Bessent has stated that the trade war was " unsustainable And with the understanding that these two major economic powers essentially operate under a trade embargo.

Zoom out: The effects of that embargo are already being noticed. retail stores, in commodity exports, and for new parents , among others.

• The lead economist for Apollo, Torsten Slok, in a recent study report On Saturday, estimates indicated bare supermarket shelves within roughly three weeks along with an economic downturn by summertime unless prompt assistance was provided.

Between the lines: Americans are rapidly losing confidence in Trump's ability to manage the economy.

• Two surveys released on Sunday — from CNN and the Washington Post — echo two polls released earlier this week by Pew and Reuters/Ipsos, showing that most adults disapprove of Trump's handling of the economy.
• These are his least impressive figures concerning economic matters over the past decade while he has been involved in public service.

What to watch: Bessent provided a sort of blueprint for a de-escalation process, which may not necessarily result in a final agreement.

• "I believe there is a way forward here. The initial step should involve de-escalation, something I feel China will need to address. Following this, we could establish a basic agreement," he stated.
• Regarding these 17 or 18 significant trade negotiations currently underway, finalizing all the paperwork for each deal might require several months. However, reaching preliminary agreements and ensuring that our trading partners adhere to the agreed terms could prevent tariff levels from escalating to their peak rates.

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