AsianFin -- U.S. Treasury Secretary Scott Bessent deemed the recent agreement on temporary trade truce a step toward “strategic” decoupling from China, and saw possible meeting with Chinese counterpart on a bigger agreement soon.

Credit：Xinhua News Agency

Bessent said the trade agreement reached at the weekend between the U.S. and China marks another stage in the U.S. shaking its reliance on Chinese products. “We do not want a generalized decoupling from China,” he said during a CNBC interview. “But what we do want is a decoupling for strategic necessities, which we were unable to obtain during Covid and we realized that efficient supply chains were not resilient supply chains.”

Tariffs protect the United States’ steel industry, and the country works on critical medicines and semiconductors, Bessent said, addingthat the reciprocal tariffs have nothing to do with the sectoral tariffs.

Bessent expected the U.S. and China to meet again in the next few weeks on a further trade agreement. “We got a lot done over two days, so I would imagine in the next few weeks we will be meeting again to get rolling on a more fulsome agreement,” Bessent said.

“Neither side wants a decoupling,” Bessent said in a sperate interview with Bloomberg.”The U.S. is going to do a strategic decoupling in terms of items that we discovered during the Covid were of national security interest, whether it’s semiconductors, medicines, steel. So we still have a generalized tariffs on some of those. But both sides agreed we do not want a generalized decoupling.”  

Bessent declined to tell if the reciprocal  tariffs on Chinese imports would go up from the current rate of 10%, but said it would be implausible that reciprocal tariffs on China will go below 10%. The Trump administration had already said 10% is a baseline reciprocal tariff level for all the U.S. trading partners.

Following talks with Chinese officials in Geneva during the weekend, Bessent on Sunday told reporters that the two countries had agreed to a 90-day pause on further trade measures.

The U.S. said it will lower reciprocal tariffs of 125% on Chinese goods to 10%, and a 20% tariff tied to the fentanyl crisis will remain. China said it will cut its tariffs on U.S. goods to 10% from 125%. China will also adopt all necessary administrative measures to suspend or remove the non-tariff countermeasures taken against the United States since April 2. The two countries will also establish a mechanism to continue discussions about economic and trade relations.