Treasury Secretary Scott Bessent Asked About China Trade Negotiations_ 'How Will You Do This Differently_'

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Speaking at the Institute of International Finance on Wednesday, Treasury Secretary Scott Bessent was asked about how he will approach trade negotiations with China.

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00:0020 years ago, a senior U.S. Treasury official gave a speech very similar to this,

00:04calling on the IMF and said the IMF was asleep at the wheel and dealing with imbalances.

00:09Hank Paulson started the Strategic Economic Dialogue with the Chinese.

00:12Every Treasury Secretary since then have had an approach.

00:15So how will you do this differently, and how do you think that you'll proceed in this approach?

00:21What is your philosophy, what is your tools, and how will you execute on this?

00:25Well, look, I think that our move toward reordering the financial or trading system is a start.

00:36I think that today, as I reaffirm our engagement but set up a list of core principles

00:44and back-to-basics for the institutions, and again, being from the private sector,

00:52we want to see results, and we want to see timelines that, as you and I were talking about backstage,

01:03global rebalancing has been a topic for more than 20 years.

01:07A long time.

01:07And, you know, it's, some countries may have a hundred-year perspective.

01:14We don't.

01:16Right.

01:17China, obviously, is an important part of this administration's form and economic policy.

01:23You'll be meeting with your Chinese counterparts.

01:25What will you tell them in the sense of how they, they obviously are aware that there's huge imbalances,

01:31their manufacturing capacity is enormous, especially in things like automobiles.

01:33How will you help them understand that it's not just about talking, it's about executing?

01:40Well, look, I don't think I have to help them understand.

01:43I think they understand very well.

01:47And it's just a matter of impetus and will.

01:52So I believe I first went to Japan in 1990, 91, within 12 months of the peak of the bubble,

02:01a decade of that unwind, a decade of malaise.

02:07And then in 2012, I ran across a fellow, 2011, he was running for prime minister named Shinzo Abe,

02:17and he knew that Japan needed change and implemented it very quickly.

02:23Ten years later, more than ten years later, Japan has had a remarkable economic run.

02:28And I think that they are Chinese counterparts that will come to this realization.

02:36And some of our policies, sometimes it takes an external push.

02:45Alternatively, what I have said previously, there is an opportunity for a big deal here.

02:54That the U.S. is looking to rebalance two more manufacturing.

03:00The identity of that would be less consumption.

03:03If China is serious on less dependence on export-led manufacturing growth

03:10and a rebalancing toward a domestic economy,

03:16I think they use the term dual circulation.

03:19Well, right now it's really singular circulation.

03:23And if they want to rebalance, let's do it together.

03:27This is an incredible opportunity.

03:29I think if Bridgewater founder Ray Dalio were to write something,

03:35he could call it a beautiful rebalancing.

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