The secretary of the Treasury, Scott Besent, defended the negotiation strategy of President Donald Trump about the commercial agreements, but said he did not know if Trump was talking directly to Chinese President Xi Jinping.
“I do not know if President Trump has spoken with President XI. I know they have a very good relationship and a lot of respect for each other, but again, I think the Chinese will see that this high level of rate is unsustainable for his business model,” Besent told the co-present “This Week” of ABC News “Martha Raddatz.
Besent also offered a “months” framework to detect a commercial agreement with China, but suggested “good behavior” from other countries involved in negotiations could prevent tariffs from remaining high.
“A commercial agreement can take months, but an agreement in principle and good behavior and maintenance within the parameter of the agreement by our commercial partners can prevent tariffs from turning to the maximum level.”
Here are more outstanding aspects of Besent’s interview:
Besent in Trump’s negotiation style
Raddatz: And President Trump’s strategy has really been to announce these rates, and mark some behind, stop them, make exceptions. Explain why you see this as a good negotiation strategy.
Besent: Well, in game theory it is called “strategic uncertainty.” Then you are not going to tell the person on the other side of the negotiation where you are going to end. And no one is better to create this leverage than President Trump. You know, he has shown these: the high rates, and here are the stick. This is where the rates can go. And the carrot is “come to us, remove your tariffs, remove your non -tariff commercial barriers, stop manipulating your currency, stop subsidizing labor and capital and then we can speak.”
About how long negotiations with China will take, other countries
Bicycle: According to Bloomberg, you said that an integral agreement between the United States and China could occur in two or three years. Trump said an agreement will arrive quickly. You have heard it say that. You said, obviously, it was going to be a job. So how long do you think?
Besent: Well, look, I think there is a path here. Then, the first way will be, again, a de -escalation, which I think the Chinese will have to have. Then I think there may be an agreement in principle, these 17 or 18 important trade agreements that we are negotiating, the real role of the commercial agreement. A commercial agreement can take months, but an agreement in principle and good behavior and remain within the parameter of the agreement by our commercial partners can prevent rates there from turning to the maximum level, sure.
About the trust of investors in the US economy
Raddatz: And it is very rare, I think it happened a couple of times in the 70s, so that the dollars, shares and bonds are beaten as hard as they did simultaneously in recent weeks. If the objective is to get countries to face the United States against China, do you worry that investors seem to be losing confidence in the United States?
Besent: Well, again, you are saying losing confidence. And he – I don’t think this necessarily loses confidence. And anything: I have been in the markets for 35, 40 years. Anything that happens in a two -week window and a month can be statistical noise or market noise. And they, you know, we are in this long term. And the important thing is that we are establishing the foundations for a strong dollar, a strong economy, a strong stock market and that investors know that they, that the United States government bond market is the safest and most solid in the world.
