US again signals desire for a China trade deal; More limits on rare earths-related exports to US; Myanmar; JD takes on Meituan
It is World Bank week here in DC and so there are lots of foreign economic and financial officials and big investors in town. Earlier today JPMorgan held a private meeting at which US Treasury Secretary Bessent spoke. Bloomberg broke the story about his comments on the US-China trade war, writing:
Bessent told a closed-door investor summit Tuesday that the tariff standoff with China cannot be sustained by both sides and that the world’s two largest economies will have to find ways to de-escalate.
That de-escalation will come in the very near future, Bessent said during an event hosted by JPMorgan Chase & Co. in Washington, which wasn’t open to the public or media. He characterized the current situation as essentially a trade embargo, according to people who attended the session.
But then the cleanup began, with reports from the Financial Times and Fox Business that people are reading too much into his comments.
And from the Financial Times:
Although Bessent expressed optimism that a deal would be reached at some point, he cautioned that there were no diplomatic negotiations between the countries to end the trade war.
Two people familiar with his remarks said however that there were no signs that Beijing and Washington were anywhere close to finding a solution and that markets were reading too much into his remarks.
One person said it was unclear if Trump agreed with his Treasury secretary.
Eamon Javers of CNBC obtained what he said was a rough transcript of Bessent’s comments. This section sounds like what Trump tried and failed to get in his first term, and then had to settle for a disappointing purchase deal while kicking structural reforms to a Phase 2 that was never going to happen, and did not happen:
I believe the report from about six months ago to which Bessent referred is “The China Shock: Learning from Labor Market Adjustment to Large Changes in Trade” from the National Bureau of Economic Research.
PRC Minister of Finance Lan Fo’an will be in DC for part of this week to attend the World Bank meetings, so perhaps there could be a meeting, but if there is not that is probably another sign of no actual progress towards even discussions to talk about an off-ramp. I am skeptical there will be a meeting.
Given the audience - representatives of some of the biggest capitalist organizations in the world - it is not a stretch to imagine Bessent’s comments will be seen by PRC policymakers as another sign that US resolve is weakening, especially on a day when the Wall Street Journal leads with this headline:
