US Treasury chief defends tariffs, warns against aligning with China

US Treasury Secretary Scott Bessent warned countries Wednesday against aligning with China on trade, as he defended President Donald Trump's move to remake the world's biggest economy through sweeping tariffs that have stoked market turmoil.

Bessent told a summit of bankers in Washington that economies potentially eyeing closer ties with Beijing over the US shift may want to think twice, saying "that would be cutting your own throat."

"They just keep producing and producing, dumping and dumping, and it's going somewhere," he added.

Bessent's remarks came hours after Trump's fresh tariffs on dozens of countries -- including many US allies -- kicked in, and shortly after Beijing unveiled equally steep counter tariffs.

The Treasury chief stressed also that Trump's country-specific tariff levels are "a ceiling" if governments did not retaliate, suggesting Trump would hold off from further hikes without pushback.

Bessent added that China chose to escalate the situation.

Read also

China seeks to 'tariff-proof' economy as trade war with US deepens

The United States has "been overwhelmed" with responses from countries seeking to negotiate with Trump, saying that Washington has had good calls with Tokyo and Seoul.

At the end of the day, Bessent said, Washington can probably reach deals with allies. "And then, we can approach China as a group."

Asked about the state of the US economy, Bessent said it remained in "pretty good shape."

'Main Street's turn'

Bessent also said the Treasury Department would work on reforms involving bank regulation.

"Wall Street has grown wealthier than ever before, and it can continue to grow and do well," he told the American Bankers Association's Washington Summit in a speech.

"But for the next four years, the Trump agenda is focused on Main Street. It's Main Street's turn," Bessent added, referring to smaller businesses, investors and institutions.

The Trump administration has been pursuing an economic policy, including tariffs, with a stated aim of transforming the US economy by boosting domestic industrial sectors and pushing for deregulation.

Read also

Markets rise despite China-US tariff clash

On Wednesday, Bessent said Trump understands national strength comes from the "ground up, not the top down," stressing that the concept applies to government as well as banking.

"For too long, financial policy has served large institutions, at the expense of smaller ones. No more," the former hedge fund manager added.

"It's Main Street's turn to hire workers, it's Main Street's turn to drive investment, and it's Main Street's turn to restore the American Dream," he said.

He added that community bankers in the room would help lead this revival.

He flagged the need as well to ensure that Trump's tax cuts from his first presidency did not expire, saying this would help support the economy.

Source: AFP