Treasury Secretary Scott Bescent is debating the possibility of bringing trade contracts and manufacturing back to the country in “Kudrow.”
Treasury Secretary Scott Bescent said he would take into account the lack of compliance with the trade contract from his first term when the Trump administration finalized China's new trade contract on Tuesday.
Bescent was interviewed about Fox Business Network's “Kudrow” after President Donald Trump raised tariffs on Chinese imports to 145%, urging China to slap a 125% tariff on exports to the US.
Host Larry Kudrow asked whether a Phase 1 trade deal with China could be used as a starting point from 2020, when agreed to end the US trade war with China at the time, and whether the administration would take on negotiations with a fresh start.
“I think we need to take into consideration that they didn't adhere to the Phase 1 deal, and as you know, the Biden administration liked tariffs but was very interested in not enforcing the purchase agreement,” Bescent said.
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Treasury Secretary Scott Bescent said the “Phase 1” trade deal could consider new negotiations with China. (Reuters/Elizabeth Franz/Reuters)
The China-signed “Phase 1” trade agreement, signed in January 2020, will buy additional $200 billion in exports in 2020 and 2021 over 2020 and 2021, but it has dropped considerably to these levels, failing to import enough to meet the pre-trade war import levels from 2017.
The Phase One Trade Agreement also featured other contracts that promised China to remove technical barriers to US agricultural exports, protect the intellectual property rights of US companies, and terminate forced technology transfers.
“In the last four years since then, trade has not become fair in China,” Bescent added. “President Trump believes economic security is national security, and when we think Americans are shocked to see supply chain vulnerabilities to something like semiconductors, we took that beta test.
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President Donald Trump and Chinese President Xi Jinping reached a “Phase 1” trade agreement in 2020. (Xinhua/Ju Peng via Getty Images/Getty Images)
He repeated that Bessent believes tariffs on China, one of the US's three largest trading partners, will not be sustainable and will eventually reach an agreement to ease them.
“As I've said many times, I think these high tariffs are unsustainable. I think US buyers have put in place a fair amount of pre-orders, and now factories in China have to be closed. And if these tariffs stay, we've seen very large estimates of potential workers' layoffs,” Bescent said.
He added, “We have a deficit with them. The surplus countries are always suffering more, and they sell us about five times more than we sell them.”
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Kudlow asked the Treasury Secretary if there is any progress in negotiations with China over a trade agreement to ease tariffs.
Bescent has been postponed to President Trump, saying the president is involved in all trade negotiations. So he will wait for him to announce those deals.
