US Signals Softer Stance Toward China as Tariff Adjustments Remain Conditional
US Signals Softer Stance Toward China as Tariff Adjustments Remain Conditional
US Treasury Secretary Scott Bessent recently struck a conciliatory tone in an interview with Fox Business Network, stating that China 'has so far fulfilled all its commitments from the negotiations'. He added that the Trump administration hopes to advance a 'rebalance' of Sino-US trade through cooperation.
The remarks are widely seen as a positive signal, suggesting a shift in Sino-US trade relations from confrontation toward dialogue in the Trump 2.0 era. Business sentiment has improved, and financial markets have reacted favorably.
As the official leading tariff negotiations, Bessent's comments reflect the administration's policy stance. His statements appear aimed at stabilizing market expectations and easing trade-related uncertainties toward year-end.
Bessent's move is also intended to reinforce mutual trust. US acknowledgment of China's fulfillment of commitments — such as controls on rare earth exports and increased soybean purchases — could help reduce trade risks and open the door to broader dialogue in areas including technology and energy. Such progress would support global supply-chain stability and lower tariff-avoidance costs for businesses.
Nonetheless, 'rebalance' remains central to US policy, with the primary objective of narrowing the US trade deficit with China. Public data point to a clear trend in this direction. From January to September 2025, the US goods trade deficit with China totaled US$175.381 billion, down 25.2% year on year from US$234.453 billion in the same period of 2024. In September alone, the deficit fell to US$16.495 billion, a 51.7% decline from US$34.154 billion a year earlier.
On tariffs, further reductions are considered highly likely, though expected to be limited in scope and subject to conditions. Tariffs were reduced multiple times in 2025, and market expectations suggest a 70–80% probability of additional cuts on China-bound goods in 2026, estimated at 5–10%.
At the same time, US Customs and Border Protection reports that new tariffs imposed since early 2025 have exceeded US$200 billion, with total tariff revenue reaching approximately US$400 billion — below projections. President Trump has emphasized the importance of tariff revenue, stating it could be used to repay debt and provide tax rebates to citizens.
Currently, the US Supreme Court is reviewing the legality of Trump's tariff measures, a process that has drawn repeated public attention from the President, underscoring the issue's importance. Separately, amid inflationary pressures, Trump has recently approved tariff exemptions for certain products.