Speaking in an interview with Fox Business on Monday, US Treasury Secretary Scott Bessent emphasized that while the US is prepared to respond forcefully to China’s export restrictions, the imposition of 100% tariffs is not inevitable.
Bessent described China’s recent export curbs as a “provocative move” and reaffirmed that the US is actively coordinating with allies, including India, to address the issue.
Key Comments from Bessent:
- On diplomacy: “We’re in touch with allies and meeting with them this week.”
- On support: “Expect support from India and others.”
- On China talks: “We believe China is open to discussion. If not, we have substantial levers to pull.”
- On escalation: “We could move more aggressively than China—everything’s on the table.”
- On tariffs: “100% tariffs don’t have to happen. The US-China relationship is good.”
- On de-escalation: “We’re confident this can be de-escalated.”
- On decoupling: “We don’t want to decouple, but China is sending that message.”
- On rare earths: “Let’s see if China wants to be a reliable supplier of rare earths.”
- On global stance: “The US is pushing for peace, while China is financing war.”
Market Reaction:
Following Bessent’s remarks, the US Dollar (USD) held firm, with the US Dollar Index (DXY) trading up 0.37% on the day at 99.22, suggesting investors view the situation as manageable for now.