By David Lawder and Trevor Hunnicutt
WASHINGTON (Reuters)-US Treasury Secretary Scott Bessent said on Wednesday that high tariffs between the United States and China are not sustainable, according to President Donald Trump’s government, opened to reduce the escalation of a trade war between the world’s two largest economies, which has generated recession fears.
US stock rates have recovered with the hope that the two countries will reduce the strong trade barriers that raised last month, although there was no sign that negotiations could start anytime soon.
Bessent said the tariffs-145% of Chinese products and 125% of US products-would have to be reduced before commercial negotiations could proceed, but said Trump would not take this unilateral measure.
“None of the sides believe these levels are sustainable. As I said yesterday, this is the equivalent of an embargo and a break between the two countries in commerce is not in anyone’s interest,” Bessent told reporters.
The Wall Street Journal has reported that the White House is considering reducing tariff levels to up to 50% on Chinese imports in an attempt to reduce tensions. A White House spokesman ruled out any report as “pure speculation” and said the news about Tariffs would come from Trump himself.
Continues after advertising
“Let’s make a fair deal with China,” Trump told reporters, but without giving specific details.
The rates of tariffs described in the WSJ report would probably still be high enough to prevent a significant part of trade between the world’s two largest economies. The German carrier Hapag-Lloyd said on Wednesday that 30% of its China shipments to the US were canceled.
Separated conversations between the two countries about combating the fentanyl epidemic have not produced results so far, according to sources.
Continues after advertising
The apparent US flexibility of China’s tariffs was a welcome signal to Trump’s erratic trade policies. The S&P 500 reference index rose 1.85% in the early afternoon, but was still more than 12% below its closing record in February.
“This is all political uncertainty and policies and what this can mean to the economy in the short term,” said Jim Baird of Plant Moran Financial Advisors.
Bessent said the third quarter of this year is a “reasonable estimate” to obtain clarity about the final level of Trump’s tariffs.
Continues after advertising
In addition to high tariffs on China, Trump has also imposed a 10% general rate on all other US imports and higher steel, aluminum and automobile tariffs. He suspended tariffs directed to dozens from other countries until July 9 and has talked about specific fees on pharmaceutical and semiconductor products. This has stirred the financial markets and increased recession fears.
The European Union, which Trump threatened with 20%tariffs, would respond with hiring if it could not reach an agreement with the United States before July 9, Economy Minister Valdis Dombrovskis said on Wednesday. He said the 27 -member commercial block offered to buy more liquid natural gas from the United States and reduce tariffs on certain products.
Other countries are also seeking to negotiate. The Vietnam Minister of Commerce spoke with US commercial representative Jamieson Greer on Wednesday, the state media said.
Continues after advertising
The International Monetary Fund said on Wednesday that tariffs will reduce growth and increase debt worldwide. Global S&P has shown that US commercial activity slowed down to the lowest level in 16 months in April, while prices charged for goods and services increased.
(Report by Andy Sullivan)
