The Trump administration recently imposed a 50% tariff on Chinese goods, in addition to 34% reciprocal tariffs, bringing the effective tariff rate on Chinese imports to 104%
. Despite these moves, former President Trump claimed on Tuesday that China, among other countries, is eager to negotiate.
Markets react to US-China trade tensionsBessent’s comments sent US stock futures sharply lower, reflecting increased concerns over a prolonged and intensifying US–China trade war. Analysts warned of potential investor pullback and disruptions in capital access for Chinese firms, which may drive them to markets such as Hong Kong or Shanghai.
While attempting to downplay the impact of the recent bond market sell-off, Bessent described China’s retaliatory tariffs as “unfortunate”. He criticised Beijing for not showing a willingness to negotiate and accused it of being one of the “worst offenders in the international trading system.”
On the possibility of China manipulating its currency to offset the impact of tariffs, Bessent warned, “What Beijing should not do is try to devalue their way out of this. That would only provoke other countries to increase tariffs to neutralise the effect.”
Chinese Yuan weakens further
China’s central bank on Wednesday weakened the yuan’s daily reference rate for a fifth consecutive session, following the offshore yuan’s slump on Tuesday to its lowest level since the offshore trading system began in 2010.
Bessent’s recent criticisms echo his earlier remarks made during a CNBC interview, where he referred to China’s tariff retaliation as a “big mistake.” He argued that the US holds a strategic advantage due to its lower dependency on exports to China.
US to strengthen tariff talks with allies
In comments made to the American Bankers Association in Washington, Bessent confirmed he would lead talks with over 70 countries to forge new tariff agreements while noting that China remains a “significant outlier” due to its retaliatory stance.
Meanwhile, China’s commerce ministry has added 12 US companies to its export control list and six others—including Shield AI and Sierra Nevada Corporation—to its unreliable entities list, effective Thursday. These entities are now barred from engaging in China-related trade, export-import activities, and investments.
-With inputs from agencies
