China Will Make Concessions First! U.S. Treasury Secretary Bessent: Europe’s Anti-Capitalism and Overregulation; Global Capital Still Prefers the U.S.

U.S. Treasury Secretary Scott Bessent Comments on Sino-U.S. Trade Negotiations, Global Capital Flows, and European Economic Situation

U.S. Treasury Secretary Scott Bessent was interviewed this morning on April 29 regarding Sino-U.S. trade negotiations, global capital flows, and the economic situation in Europe. He emphasized that the global capital continues to view the United States as the preferred choice, further stating that China must make concessions if it wishes to de-escalate conflicts. Previously, media outlets reported that Bessent had claimed during a private meeting at JP Morgan that “things will cool down soon,” which led to a significant market surge. In response, Bessent clarified that he had never disclosed information beyond what was publicly available, and the market should not overinterpret his comments.

Sino-U.S. Trade Negotiation Progress, Bessent: China Must First Concede

Bessent was first to respond to the current progress of Sino-U.S. negotiations. He stated that communication between both parties remains ongoing, but he emphasized:

“It is China that should make concessions because their exports to the United States are five times what we export to China.”

He pointed out that the 125% to 145% tariff standards imposed by the United States would be unsustainable for China, implying that the U.S. currently holds the upper hand in negotiations.

Global Trade Negotiation Progress, Bessent: The U.S. Has a “Standard Contract”

Regarding whether the U.S. has a standard that could expedite negotiations, Bessent stated that there is indeed a standard version, but it will not be disclosed publicly. He emphasized that apart from China being a complex case, 17 other important Asia-Pacific trading partners have proposed “very sincere” tax reduction offers, which the U.S. is evaluating one by one.

Criticism of the Biden Administration for Worsening Situations, Trump Reshaping Trade Patterns as a Victory

Bessent mentioned that observing the conditions proposed by various countries led him to exclaim: “How did we get to this point?” He believes that it is not that these countries are too tough, but rather that the previous Biden administration placed the U.S. at a disadvantage, and now the Trump administration is working to reverse the situation, which is a significant victory.

Where is Global Capital Going? Bessent: The U.S. Remains the Preferred Choice

In response to concerns about the decline in the value of American brands and the potential outflow of capital to other regions, Bessent cited the perspective of renowned hedge fund manager Kyle Bass, who pointed out that the European economic system is characterized by “anti-growth, anti-capitalism, heavy taxation, and over-regulation.”

“The European Stoxx 50 index has averaged less than 2% annual returns over the past 20 years, while the S&P 500 has exceeded 10%.”

He emphasized: “If you don’t invest in the U.S., where else can you go? Europe is clearly not the answer.” He also mentioned that the U.S. is committed to tax stability, fair trade, and the elimination of excessive regulation to ensure a continuous flow of capital into the United States.

U.S. Treasury Secretary Cites Remarks from Renowned Hedge Fund Manager Kyle Bass

Analyzing Europe’s Predicament: High Tariffs and Fear of Euro Appreciation

Bessent further analyzed that there are significant trade barriers within Europe:

Tariffs on goods are 50%
Service items are 100%, with severe self-imposed restrictions.

He predicted that due to the excessive appreciation of the euro, the European Central Bank (ECB) may be forced to lower interest rates in an attempt to suppress the euro’s exchange rate, contrasting with the U.S. strong dollar policy.

Increased Risks in China, Capital Flight May Become a Concern

In addition to Europe, Bessent also mentioned that recent actions by China have raised concerns in the capital markets. He cited that China recently claimed sovereignty over certain Philippine islands, which could make foreign investors hesitant: “Who would dare to invest money in such places?”

The image depicts the competition between China and the Philippines over ### islands to assert sovereignty

Clarification on “Private Meeting Comments” Incident, Bessent: Market Misunderstanding

Regarding earlier reports of Bessent’s comments during a private meeting at JP Morgan, which stated that “things will cool down soon,” leading to a temporary market surge, Bessent responded: “What I said at that meeting had already been reported in the media 72 hours prior.” He added that after he held a press conference, the market actually declined, suggesting that the fluctuations were not caused by his comments.

Optimistic About Sino-U.S. Situation, Bessent: China’s Subsidized Selling Model Won’t Last

Finally, Bessent reiterated that although negotiations with China are complex, he believes: “China’s reliance on government subsidies to sell products at low prices in the U.S. will not last long.” He is confident that China will ultimately make concessions and initiate discussions.

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