
Time for hardball with China over, US wants softer deal

Having admitted that the 145% tariff rate imposed on China is unsustainably high, the Trump administration has conceded that it’s time to stop playing hard ball and rebalance. Share markets in the United States rallied overnight in response to the revelation by Treasury Secretary Scott Bessent that it’s now time for a sweeping agreement that winds down the trade war with China. “If they want to rebalance, let’s do it together,” Bessent said during an appearance at the Institute of International Finance (IIF) in Washington, D.C. Unconfirmed reports by senior White House officials suggest levies are expected to finally settle somewhere between 50% - 65%, which would still be relatively high.Restore consumption-led growthBessent said the U.S. now wants China to provide a schedule and achieve measurable progress for a foundational shift in its economy toward consumption-led growth. These proposed changes are expected to spur demand for U.S. exports and narrow the bilateral trade gap, which Washington has been urging Beijing to close since 2006. Bessent cited recent data that shows the Chinese economy tilting even further away from consumption toward manufacturing. “China’s economic system, with growth driven by man