In a riveting recent interview on CNBC’s “Squawk Box,” Treasury Secretary Scott Bessent explained, among other things, how to address this latest round of trade disputes. In response, he stressed that de-escalation depends on China. His remarks come on the heels of a similar announcement by President Donald Trump that he intends to keep a 10% across-the-board tariff. In addition, Trump has chosen to defer tougher duties on a per-country basis by 90 days.
Bessent stressed the growing concern of European countries regarding the strength of the euro. It has recently rallied close to 10% against the U.S. dollar this year. He pointed out that this increase started when the trade war started to ratchet up. You’re going to see the [European Central Bank] cut rates to try to strengthen their euro. Europeans don’t want a strong euro. We have a strong-dollar policy,” he explained.
Of course, markets are already rattled after Trump blindsided the world with a plan to impose tariffs on pretty much every imaginable product on April 2. Bessent promised that the White House won’t negotiate in public. He stressed the importance of having these discussions with Chinese officials as they make their way to Washington this week. He sounded hopeful notes on ongoing trade discussions with other countries.
Bessent emphasized India’s importance as a key player in future trade agreements. He went on to boldly predict, “I would be surprised if India was not one of the first trade deals we signed. So watch this space at least.” He repeated that the U.S. has advanced quite far in opening up such negotiations with a number of countries. Many countries have come forward with interesting and encouraging ideas.
The Secretary’s assessment is an important reminder that our trade relations around the globe are often complicated. The U.S. must be shrewd to defend its place between increasing tariffs and an appreciating dollar. Bessent underscores the urgent need to address these issues. He places special emphasis on state and local efforts to build relationships with China and other countries in Asia.
“I believe that it’s up to China to de-escalate, because they sell five times more to us than we sell to them, and so these 120%, 145% tariffs are unsustainable.” – Treasury Secretary Scott Bessent