ECONOMYNEXT – United States Treasury Secretary Scot Bessent said “substantial progress” was made in face to face trade talks with China in Switzerland.
“We will be giving details tomorrow, but I can tell you that the talks were productive,” Bessant said in a statement.
“We had the [Chinese] vice premier, two vice ministers, who were integrally involved, [US Trade Representative] Ambassador Jamieson [Greer], and myself.”
The US was trying to reduce a 1.2 trillion trade deficit which was a ‘national emergency’ Greer claimed.
“It’s important to understand how quickly we were able to come to agreement, which reflects that perhaps the differences were not so large as maybe thought,” he said.
“That being said, there was a lot of groundwork that went into these two days.”
US had a trade deficit because the government debt is bought by foreigners, private foreign investors buy US shares especially in areas like IT and foreigners also buy agency debt.
When the money is invested in the US, it creates a trade deficit and has little to do with tariffs.
By pushing up domestic costs however tariffs on imported inputs can reduce the export competitiveness of American companies.
The statements made by Bessent and Greer is reproduced below:
Secretary of the Treasury Scott Bessent: “I’m happy to report that we made substantial progress between the United States and China in the very important trade talks. First, I want to thank our Swiss host. The Swiss government has been very kind in providing us this wonderful venue, and I think that led to a great deal of productivity we’ve seen. We will be giving details tomorrow, but I can tell you that the talks were productive. We had the vice premier, two vice ministers, who were integrally involved, Ambassador Jamieson, and myself. And I spoke to President Trump, as did Ambassador Jamieson, last night, and he is fully informed of what is going on. So, there will be a complete briefing tomorrow morning.”
U.S. Trade Representative Ambassador Jamieson Greer: “This was, as the Secretary pointed out, a very constructive two days. It’s important to understand how quickly we were able to come to agreement, which reflects that perhaps the differences were not so large as maybe thought. That being said, there was a lot of groundwork that went into these two days. Just remember why we’re here in the first place — the United States has a massive $1.2 trillion trade deficit, so the President declared a national emergency and imposed tariffs, and we’re confident that the deal we struck with our Chinese partners will help us to work toward resolving that national emergency.”