US treasury chief backs current China tariff status, cites “working pretty well”

US Treasury Secretary Scott Bessent has conveyed that the United States is content with the existing tariff arrangement with China, suggesting that the Trump administration aims to maintain a stable economic relationship with its key rival ahead of the impending trade truce expiration in November.

When questioned about the timeline for progress in trade negotiations and whether a formal agreement was necessary given the current tariff situation, Bessent stated, “We’re very happy” with the status quo, Bloomberg reports.

He elaborated, “I think right now the status quo is working pretty well.”

Highlighting the financial significance of tariffs on Chinese goods, Bessent remarked, “China is the biggest revenue line in the tariff income — so if it’s not broke, don’t fix it.” He further noted, “We have had very good talks with China. I imagine we’ll be seeing them again before November.”

These comments underscore an ongoing easing of tensions between Washington and Beijing, potentially paving the way for a summit between President Donald Trump and Chinese leader Xi Jinping. The Trump administration has recently softened its confrontational rhetoric toward China in hopes of securing such a high-level meeting and a comprehensive trade deal. Secretary of State Marco Rubio has affirmed the likelihood of a forthcoming Trump-Xi meeting, although no official date has been set.

Last week, President Trump extended a tariff pause on Chinese imports for an additional 90 days, through early November, a move credited with stabilizing trade relations between the world’s two largest economies. This extension followed a mutual agreement to curb retaliatory tariff hikes and relax export restrictions on rare earth magnets and select technologies.

Financial analysts at S&P Global Ratings have noted that revenues generated from Trump’s tariffs contribute to offsetting the fiscal impact of the administration’s tax cuts, aiding the United States in preserving its current credit rating.

Nonetheless, the ongoing trade dispute continues to inflict economic strain domestically. Caleb Ragland, president of the American Soybean Association, cautioned in a letter to President Trump dated Tuesday that American soybean farmers are approaching a “trade and financial precipice” and cannot endure a prolonged conflict. Despite Trump’s recent hopes that China would substantially increase soybean purchases, the country has yet to buy any cargo from the upcoming harvest beginning in September.

In a development likely to provoke Beijing, the Trump administration is preparing to intensify scrutiny of imports such as steel, copper, and lithium from China. This move aims to enforce a US ban on goods allegedly produced using forced labor in the Xinjiang region. This initiative aligns with broader US trade objectives, including reducing the trade deficit with China and pressuring Beijing to restrict shipments of fentanyl and precursor chemicals.

Earlier this month, President Trump doubled tariffs on Indian goods to 50%, citing India’s discounted oil purchases from Russia as contributing to funding President Vladimir Putin’s war in Ukraine. While concerns have emerged that other nations might face similar “secondary tariffs”—given China’s role as the largest buyer of Russian crude—India remains the sole major economy subjected to such measures.

Addressing the administration’s restraint in imposing secondary tariffs on China, Bessent told CNBC that India’s increased oil purchases occurred only after Russia’s full-scale invasion of Ukraine in 2022.

As trade negotiations continue, the administration’s balancing act reflects a strategic effort to maintain revenue streams, exert economic pressure on Beijing, and navigate complex geopolitical challenges.

By Vafa Guliyeva