U.S. Treasury Secretary Bessent: Temporarily reducing tariffs on China from 34% to 10%, will raise them again if no agreement is reached after 90 days.

US Treasury Secretary Scott Bessent ( stated in an interview this morning on May 13 how the Trump administration reached a 90-day tariff pause with the Chinese delegation in Geneva, Switzerland, and initiated subsequent structural negotiation mechanisms. Bessent emphasized: "This is not a concession; it is to ensure adjustments and pressure." He also revealed more about China's economic pressures, fentanyl controls, and strategies to prevent Chinese transshipment goods from entering the US.

The US and China reached a 90-day tariff suspension agreement, and if negotiations fail afterward, tariffs will be raised again.

Besant was the first to state:

Both the United States and China have agreed to suspend the imposition of a new round of tariffs for the next 90 days.

The two parties established a regular consultation framework called the "Geneva Mechanism" to address structural issues including non-tariff barriers and the protection of strategic industries.

Currently, the 34% tariff on China has been reduced to 10%, but he emphasized that this is just a suspension, not a cancellation. If no agreement is reached in 90 days, it may be increased again.

Focusing on Non-Tariff Barriers: The US side presents a list, and the Chinese side needs to make specific changes.

Regarding the long-term use of non-tariff barriers in China, such as:

subsidy

Quota

Administrative Review

Measures to exclude American companies. Besent stated that the U.S. Trade Representative has a list of obstacles that China has posed for decades.

The main goal of this 90-day tariff negotiation agreement is to allow China to open its market, remove unfair restrictions, and enable American companies to enter China on fair terms.

The world sees pressure on China, with factory closures, declining orders, and social instability.

When asked by the host whether China is showing a sense of urgency, Bessent responded that although the Chinese negotiating representatives seem calm and collected, the United States clearly sees the decline in Chinese exports, the drop in manufacturing PMI, and even signs of social unrest.

He stated: "The Chinese Vice Premier is a seasoned negotiator, but we can see that their economy is indeed under pressure."

Preventing Chinese circumvention of anti-dumping in Mexico, negotiations on US-Mexico trade are ongoing.

When asked whether China would use the "transshipment" method to export goods to Mexico first and then to the United States to avoid taxes, Bessent admitted:

"This is already happening, especially in cars and electronics."

The United States has begun simultaneous negotiations with Mexico to close this loophole. He added that if China's "dual circulation" policy only aims to dump excess capacity to the world, it will disrupt the global supply and demand balance.

Significant progress made in US-China fentanyl cooperation

In particular, Beszent pointed out that the Geneva meeting also talked about another big breakthrough, that is, the fentanyl drug problem. He said:

"China not only sent a trade delegation, but also sent the deputy minister of public security in charge of drug regulation, while the United States also sent a national security advisor."

Both parties will engage in in-depth technical discussions on source material control to lay the foundation for concrete cooperation within the next 90 days.

To de-risk rather than fully decouple, the United States wants supply chain autonomy

When asked whether the reduction in tariffs would weaken efforts to bring manufacturing back to the U.S., Bessent stated it would not, and emphasized:

This is just a buffer adjustment against the short-term "countering the escalation."

High tariffs and investment incentives for strategic industries such as steel, pharmaceuticals, and semiconductors continue.

He stated: "The United States does not want to completely decouple from China, but we cannot repeat the supply chain crisis of shortages and material bottlenecks that occurred during the COVID period."

Will the reduction in tariffs cool down the US economy? Treasury Secretary: Not worried, current data is strong.

Bessent emphasized that the current 20% base tariff is still in place, along with the newly added fentanyl tax from February, and the market has already adapted.

He expects that the economy will not only avoid recession but will also become more stable due to reduced uncertainty:

"Current economic data in the United States is stronger than expected, and now lowering it back to 10% will help businesses with budget planning."

Finally, Bessent revealed that a new round of Geneva talks will be launched in the coming weeks, focusing on addressing non-tariff barriers and manufacturing policies, in an effort to negotiate a more comprehensive and enforceable long-term agreement.

)China has launched large-scale easing measures in an attempt to staunch the economic bleeding caused by the trade war(

This article: US Treasury Secretary Bessent: Temporarily reduce tariffs on China from 34% to 10%, and if no agreement is reached after 90 days, it will be raised again. First appeared in Chain News ABMedia.