Bessent says the tariff standoff with China is unsustainable and that he expects the situation to de-escalate.
Situation to De-Escalate
Stocks reversed yesterday’s losses with some Wishful Thinking from Bessent.
US Treasury Secretary Scott Bessent told a closed-door investor summit Tuesday that the tariff standoff with China is unsustainable and that he expects the situation to de-escalate.
Bessent added that negotiations haven’t started but that a deal is possible, according to people who attended his session at an event hosted by JPMorgan Chase & Co. in Washington, which wasn’t open to the public or media.
The Treasury Department didn’t immediately respond to a request for comment.
The Path to De-Escalation
The path to de-escalation is both clear and easy in theory, but extremely difficult in practice.
The only person who can de-escalate the tariff standoff is Trump.
He can pick up the phone at any time, admit mistakes, back down, drop his insane tariffs on the world, and start all over.
Conceptually this is clear and very easy. What about practice?
Bessent is hoping to buy time. I don’t particularly care for him, but perhaps he is doing the best he can with Trump changing his mind weekly, or even hourly.
Related Posts
March 10: Trump and Secretary of Treasury Bessent Discuss the “Detox Recession”
Don’t worry, it’s just a little more pain and inflation disturbance before tariff greatness begins.
The above attitude lasted until Reciprocal Tariff madness started on April 2.
March 16, 2025: Trump Wants a Weak Dollar But Needs a Strong One
Trump wants the Fed to cut interest rates to weaken the dollar and boost exports. But that’s not what helped him get elected.
On April 2, I noted Trump’s Big Announcement Is Half-Reciprocal Tariffs on the World
Factoring in value added taxes and other alleged manipulations, Trump announces Half-Reciprocal Tariffs with a minimum baseline of 10 percent.
The stock market immediately puked, and counterintuitively so did bonds and the dollar.
That’s a sign of foreign investors pulling the plug on US assets. Treasuries became a questionable asset and gold soared to new record highs daily.
On April 9, 2025 I noted Trump Capitulates with a 90-Day Pause on Tariffs, DOW Jumps 2,200 Points
Trump has had enough of the stock market decline.
However, Trump did not fully back down on Mexico or Canada, treating our two best trading partners worse than the rest of the world.
What we did not know at the time was Bessent’s role in this pause.
We found out on April 20.
I then reported How the Tariff Pause Happened – Navarro Was Purposely Out of the Room
Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick timed a meeting with Trump.
Get Rid of Navarro
Navarro needs to be out of the White House permanently. But that is impossible because of Trump’s misguided faith in his trade advisor.
And Lutnick continually runs hoops to support Trump’s contradictory mission, assuming there is a mission. But at least Lutnick was on the right side of this effort.
Bessent is running a tightrope but he managed to pull this stunt off.
Trump’s Trade Wars Will Fail, Currency Wars Will Be Next
Here’s a relevant post that haven’t mentioned recently.
On December 23, 2024, I commented Trump’s Trade Wars Will Fail, Currency Wars Will Be Next
Trump will fail to increase exports with trade wars and tariffs. Currency wars will result.
On December 23, 2024, the US Dollar Index closed at 108.02. It’s now 98.58, down 8.7 percent.
Welcome to a trade war and a currency war. The world correctly understands the US is not the best place to invest.
To repeat: On April 2, along with reciprocal tariffs, the stock market immediately puked, and counterintuitively so did bonds and the dollar.
That’s a sign of foreign investors pulling the plug on US assets.
This is what we call winning.
With all this consistency, the whole world must be just jumping up & down to invest in America and the American workforce.
Is not the demise of the dollar a positive development for trade. It mades purchasing foreign products more expensive while purchasing American products become more tenable.
At the peak, the Nasdaq was 65% above it’s base trend line from the 2009 low, which occurred when Congress told FASB to allow banks to lie about the value of their assets. It is wishful thinking to expect the market won’t revert to the mean, as has always happened in the past. All bubbles burst, even an everything bubble.
Powell has already started to validate Trumps’ tariffs prices.
I wonder if insider trading is going on with call options for stocks like Amazon. Look at Amazon’s after hours price jump tonight. It’s insane as far as the level of volatility over the last month.
1368 – Those are the number of days left in Trump’s administration and how long the world will need to wait for sanity to return to the global economic system.
Until then, expect chaos, volatility and growing unemployment around the world. I also warned years ago about coming food shortages, soaring insurance rates, and soon utilities “issues” across the board.
Don’t say you weren’t warned and don’t forget that Trump and the GOP own this 100%.
This is all so much fun to watch.
20 days since liberation day.
Trump claims we are collecting $2b/day in tariffs, but nobody can back that up.
We are supposed to sign 90 trade deals in 90 days. Yet none so far.
50 countries are reaching out to make deals. Why don’t you list them?
They keep saying that China is hurting and needs to make a deal. So why won’t they talk to us?
Execs from tech, auto, and retail have made the pilgrimage to the WH to beg to get tariff relief. Tech and auto did get temporary relief. Retail remains to be seen.
Bessent says a trade war with China is unsustainable, and expects a de-escalation. I guess we will have to De-escalate because China won’t even talk to us.
One day Trump wants to fire Powell. Next day he has no intention of firing Powell.
What a show!
Burned thru several cases of popcorn already. Ordering more.
This is what should be expected from a mentally ill dictator. No real surprise here.
There is no way Trump should be allowed to finish his second term. He should be impeached and removed, actually he should never have been elected. Trump is mentally ill and not medically or mentally fit to serve.
More fit than Biden. Democrats hid the truth about him and never moved to impeach him.
The Fourth Turning warns about Fourth Turning wars. Sanity won’t be returning to the economic system, until the world record debt bubble outcome is resolved.
Globalists Net Zero “sustainable” agriculture will result in food shortages. Shutting down Dutch farms because climate change, does not produce more food. Valero is looking to shut down it’s California refinery, due to California Democrat policies, which will drive up gasoline costs here. I was warned about the Democrats and globalists. They do own this.
I usually give presidents and the new Congress six months in office before they own the political, economic and societal outcomes. But in Trumps’s case due to his executive orders, policies, WH statements and from administrative personnel that report to him, the six month window is closed.
He has almost single handily starting with his 2nd dystopian “inaugural” speech managed to take a worsening economy and make it worst. He took a divided nation and made it worst so much that the Democratic Party that is captured by another brand of plutocrats and oligarchs will most likely take back the House and Senate in ’26 assuming martial law hasn’t been declared or the biennial election isn’t canceled. He has alienated every ally that we had prior to his swearing in and increased war tensions in the Middle East. He has threatened Mexico, Canada, Greenland, and Panama with invasion and wants to turn Gaza into a resort while somehow moving 2 million of the current residents to Egypt and Jordan that will not accept their emigration. He has made worst the Yemen crises that is estimated to cost the American taxpayer over a $1B in dropping bombs, etc. on the Houthis. He is at a stalemate with Russia. Iran – US relations surprisingly has improved from where it was at in his last administration but given Trump’s penchant to change his mind depending upon who was last in the room this is subject to change.
Trump owns the real economy, the stock and bond markets, US foreign policy, its wars – some that he didn’t start but they are still his as president – the almost weekly protests, the illegal acts of deportations without legal processes, and ad nauseam his other petulant tantrums since becoming the 47th president.
I think the root of the problem is the reckless senseless deficit spending carried out by both parties for decades. When problems are ignored so long, bad things happen. Hopefully Americans civic duty will be reawakened and we’ll begin austerity willingly, as the more we delay, the more we’ll submit to, and our stability can be restored with this acceptance.
To settle the score, we should look and analyze the next treasury action. Then we can make some conclusions.
Trump Backs Down, Says He Has ‘No Intention’ Of Firing Fed Chair Jerome PowellLast week, the president said Federal Reserve Chair Jerome Powell’s “termination cannot come fast enough!” Days later, Trump said he has “no intention” of firing him.
You don’t mess with the iron bank. Many presidents have had to be spanked and reminded of that fact.
Before you conclude anything about the impending USD weakness, go to Youtube and look up “Milkshake, Markets and Madness” with Brent Johnson; Also find Jeff Snider (EuroDollar University) and both will straighten you out, Mish, on the MECHANICS of the USD. Clearly you have not run across their current commentaries.
I have gotten to know Brent personally and I plan to fly down and meet him in Puerto Rico and buy him a beer and some Cuban food and we are gonna talk turkey.
The last time anyone made anything around here was those stupid ‘as seen on TV’ Ronco clothes steamers that always melted and blew up.
I always wanted a pocket fisherman. Just glad I don’t need spray-on “hair”.
the “peasants” in China will not sit through the requisite humiliation that Trump is dealing in these days.
I know I’m right to add to my prior post you won’t post. Jim Quinn predicts the same thing – when it goes a little farther sideways it’s going to blow up.
Have had two hardcore real cowboys say recently it’s almost time to do the unspeakable, it’s one housing collapse away,
https://www.zerohedge.com/s3/files/inline-images/AmericasDifferentCivilWar2-gguy4.jpg?itok=v7WZKkW1
Also I have at least 60 internet able devices in my lab and if I wanted to I could slip around your ban or use a VPN but I’m too honest to do that.
So they haven’t even started negotiating and he already knows the outcome?
They just keep proving that this administration is a total clown show.
Yep, I expected a LITTLE better but methinks that Trump is getting senile.
I am starting to wonder if there is insider trading involving call and put options for stocks that have become even more volatile over the last 30 days.
A lot of hyperbole here. “Foreign investors are pulling the plug …” Yeah, no. And then wishful thinking, in a perverse fashion, of linear extrapolation. Mexico and Canada are our best trading partners? How much is rerouted from China thru Mexico? As for Canada, all I know is they have oil and their maple syrup sucks. I think they used to be good at hockey. How are they our best trading partners? Trudeau and Vreeland were both WEF scum. Socialist authoritarians. How is that helpful?
Another insider traders’ meeting among a discrete group.
However, how can anyone believe anything that originates from dc these days. I guess it is easy to trade with O.P.M.
EXACTLY, look at Amazon during after hours trading today. Who bought calls for Amazon and what is their relationship to those within the Trump administration ?
‘Stocks reversed yesterday’s losses with some Wishful Thinking from Bessant’
Stocks go up or down because of temporarily-related minutely, hourly, daily, weekly, monthly respective oversold or overbought trading conditions. The final hourly progression for the SPX in completing its 7 April 3/6/4 of 6 day 13 day 4th fractal started on 16 April 2025 for its final 6 day subseries 3rd fractal is a 6/15/9 of 15/9-10 hour :: x/2.5x/2.5x/1.5-1.6x 4-phase crash fractal series. There will be a crash devaluation over the next two days possibly extending into Friday morning with possible trading halts. The tariffs have made things worse but are ‘only’ a very major loud exclamation point near the end of a 1982 13/32 of 33 year major debt-credit cycle (which will likely decimate the strangely-morphed GOP in the midterms)…
More firms are moving from Delaware and moving to TX or Nevada.
.. because top insiders, princelings, want to undercut the rights of shareholders. A.k.a. race-to-the-bottom. Oligarchy at its finest, spearheaded by Musk. Who benefits? The investing public? Or the have-mores and have-even-more-of-mores?
Get rid of the three musketeers – Navarro, Hegseth and Bessent who told us: since we gained 50 pounds, not 5 pounds, we can get heart attack, cancer or strokes.
It’s already too late for that, the damage has been done. Trump has created so much ill-will among allies and trading partners he will never be able to undo it.
Yes, because now, even with a walk-back, the world realizes how temporary and fragile the US political system is. I have to spread some blame, as the do-nothing Congress (enabled by the pin-headed, selfish electorate) enabled a drift into multiple presidents doing ever-more executive-orders overreach, until finally we arrived at this deeply degraded condition. But Dems egged this along too.
If the world thought they could rely on the U.S., the world was dumb.
Tell me how do you save the face first?
Note that what he is saying is what Trump did is so batshit crazy that it can’t possibly not get fixed.
Completely insane to have our trade policies determined by this sort of “logic”. .
There is no logic, Trump is insane. 10% of Americans, the MAGA Cult are insane. These are not normal people in abnormal times.
Best joke I’ve read this millenium, right here:
“He can pick up the phone at any time, admit mistakes”
He obviously is fundamentally incapable of admitting mistakes. Name one time he admitted making a mistake that wasn’t a backhanded self-compliment (e.g. “I was too nice to the evil Commie dems”)
He can pick up the phone at any time, admit mistakes, back down, drop his insane tariffs on the world, and start all over.
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exactly!!! thank you Mish for this.
Mr Trump. middle size NY real estate hustler thought he would take on nation w/ 1.5 bln of proud people , 5000 years of history, 2d or 1st economy of the world , obv biggest manufacturer of world, and happens to be in w/ friends w. two out of 3 biggest energy producers of world (iran and russia), or in case of Russia biggest commodities producer of world too.
well, how long did it take? couple weeks ? and bluff is no more…..
alx
Name one mistake Trump admitted in his life
Dubya said his was trading Sammy Sofa.
Pence
China can just pivot to their domestic market. But they can’t because of overproduction. They have to sell their cheap shit to someone, but who? Within 5 miles of my house, there are hundreds of storage units. Full of what? More cheap shit people don’t even have room for anymore. You see, China’s domestic market is the people who make the cheap shit for export at cheap wages, so they know better than anyone how worthless the crap really is. Oh, they can sell it, I guess, for 90% off.
The Chinese people are broke. They save 30% of their incomes because there is no safety net from the government. They put the savings into real estate and take on mortgages for apartments that aren’t even built. But they never got built in the RE bust and now they owe on the mortgages. What a great investment strategy.
Are they going to sell their overproduction to the Europeans? Do the Europeans want cheap Chinese shit competing with their own production? I don’t think so.
So, we’re right back at the beginning of the trade war problem. China is the world’s overproducer of cheap shit and 30% of it has been exported to the US. We’ve had enough of it, and we’re the only country in the world willing to run up our credit cards to the limit to buy it.
Yeah, Europe especially Italy France and Germany probably don’t have the same appetite for low price Chinese goods as the typical Walmart and Best Buy shoppers do in the USA.
“We’ve had enough of it” what do you see that makes you think Americans have had enough of it, the cheap shit? As a woodworker I buy tools from time to time and they are almost all made in China they are getting better. Stanly, Milwaukee, Rikon, Ryobi, Delta, Bosch, DeWalt etc almost all made in China.
China has been preparing for this moment for many years.
And said will Fight to the end.
I can see bruises and blood on both sides.
Even if there is negotiation it will take really long.
Damage will be absolutely large.
Will be all time Box Office Movie.
The idea that China doesn’t have to come to the table is funny. Sure there will be repercussions here. But nothing like what they are looking at.
https://www.dlacalle.com/en/container-orders-plummet-trade-deals-now-or-economic-depression-soon/
yeah. and this mor1on knows from what? watching cnn?
does he even speak chinese lang?
The problem with bringing back U.S. manufacturing is that manufacturing is not a fun job — it’s a soul-killer. It typically involves standing on an assembly line, and doing one of a hundred steps in a complex process to make a complex item for sale in the marketplace. Karl Marx based his entire political economic philosophy on the soul-deadening aspects of human-based task-specific manufacturing.
What Marx didn’t foresee was electricity and industrial robots. Factories are coming online now that are nearly fully automated. This will render obsolete the cheap labor the Third World presently provides, and make possible a golden age of human leisure and intellectual pursuits … such as — Ta Dah! — commenting on public forum blogs.
There are other good jobs out there than soul-killing, back-aching manufacturing labor. Just give the economy a chance to MANUFACTURE them.
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You can read more of my writings by visiting: dark. sport. blog — on the net!
There are actual defense reasons we should be able to manufacture. There is nothing that says everything should or needs to come back. Being unable to make most things is a problem. And puts the safety of that country at risk.
Once AI takes over,the concept of countries and national borders will disappear. We will be one world and there will not be any need for “defense”.
Maybe but when that happens the need for humans will disappear.
Would not be a concern if Trump wasn’t destroying all of our relationships and international trust built over decades if not centuries, in mere days.
I was hoping Trump would identify publicly what we need as a nation to not rely on other countries particularly competitors or adversaries, such as antibiotics and medical equipment.
So try to build enough domestic manufacturing capacity, even if Defense Health Agency owns it and contracts out its operation and maintenance to a non profit like a university.
This is not much different than Department of Energy owning Los Alamos National Laboratory and a university consortium operates and maintains it.
I like that Trump said there will be a shipbuilding council in the White House.
All the world needs os for Trump to stop sharing brain farts on social media and the market at least will recover.
any day he does’t open his mouth like that is an up day.
Already we are hearing abuot deal outlines that are reportedly short on details, and will amount to the same BS “we promie to buy more american stuff” deals he made before.
These will surely mollify the markets. Trump will claim victory.
Fox News and MAGA will argue among themselves about whether Trump played 6D chess or 12.6 dimensional chess as sublime tears roll down their face, their sublimed visage turned towards heaven as they recount Trump’s glories.
There is a lot of comfort in stupidity
I made a similar comment last week that Trump will accept any tiny crumb that China throws as an excuse to cut & run, declaring victory and sending the stock market rocketing back toward all-time highs. What’s getting scary is that China isn’t budging like at all. Not a peep. I’m sure Xi knows that he could easily placate man-child Trump without sacrificing anything significant, but they won’t let Trump off the hook so easily, it seems. And we all know Trump won’t reach out and admit mistake. All that said, this still doesn’t feel like the tariffs will be prolonged.
China will win the trade war, no question about that. That is if “winning” is even possible, but they will end up better than the USA.
EXACTLY, Trump is not playing poker. He’s gone full Roy Cohn and needs to be a lot more reserved.
I am not sure if he thinks this is going to help him win like intimidate trading partners into significantly reducing trade deficits.
But someones are making a lot of money on the stock option market such as buying calls for Amazon a day or few days before it jumps +10% in one or two days.
And I am not asking what is their relationship to the White House or who do they know that knows someone in the White House.
If we get rid of Trump, Navarro, Hegseth, Bessent – these clowns and their tariffs – cheeese. The people elected them to cut fat.
as if it would change anything!
remember George Carlin, and his rant about politicians in USA
Everybody complains about politicians. Everybody says they suck. Well, where do people think these politicians come from? They don’t fall out of the sky.”
I 110% believe Bessent planned and timed this basic PR stunt to offset the US gathering of IMF Economists today. FAR beyond just a coincidental timing. Further, it completely fits that Bessent just offered as you say a wishful cheerleading type vague statement.
In reality a “sell the news” pathetic PR move.
You misspelled “opportunity to make more illegal insider trading profits”
Bessent is establishing himself as the abuser-apologizer-markets soother. This good-cop bad-cop pattern is setting in, with the S&P following in bipolar fashion. It is just an enabling extension of the Stockholm Syndrome: President Twitler can and does brush it aside with a few words at will (and his world-historical levels of caprice). I had hope for Bessent, as I did with some Trump 1.0 guys, but Bessent has shown he doesn’t have the minerals, he doesn’t wear the pants. he just mollifies people with no idea what the boss will do in 5 seconds.
Bessent’s details are pretty darn vague on how this “de-escalation” is gonna work. Word salad statements like ‘Trump is “setting the stage for a deal with China,” she said, “and the ball is moving in the right direction”’ from the wind-up doll are typical of what’s been coming out of the WH mouths. Which given past performance is hard to believe. Next rage tweet in the deep of night re Powell might just flip markets the other way.
Every time you’re exposed to advertising(=politics=businesses) in America you’re reminded that this country’s most profitable business is still the manufacture, packaging, distribution, and marketing of bullshit. High-quality, grade-A, prime-cut, pure American bullshit.
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George Carlin
There are enough stupid people in the USA for this to work, thanks to how the US education system has been torpedoed systematically for decades.
I would include both parties in that disaster.
According to Martin Armstrong, China offered to talk privately. This is typical China, they don’t like open discussions. Martin has been critical of Trump’s dealing with China. Trump doesn’t understand their culture. The Chinese have a “save face” attitude. They can never lose or look bad to their citizens. This is why they still call the country CCP when clearly they are not communist; that would make Mao wrong. Trump’s Negotiating style does not work in China. He’s getting bad advice.
Not communist? Explain
A nation state or society can’t have a mercantilist trade policy, private enterprise as a percent of GDP as China does, shadow banking, etc., and considered a communist country as defined by Karl Marx.
They call literally call it communist with capitalist characteristics. China’s own definition. It’s clearly a command economy. Further, Xi has made it less open since he took over and allows less freedom that before. The dopey idea that admitting them into the WTO would lead to more open and progressive China backfired totally. At least for the world. Not so much for China.
Correction. They call it Communitst with Chinese Characteristics. In nowhere will they even say Capitalist
To quote another poster here: “only uneducated morons would called China w/ 500+ billionaires and countless millionaires COMMUNIST!!”
Not saying I agree.
Keep in mind that all of them are members of the CCP. How do you think they become Billionaires? And ship their money and children to the US.
You don’t understand communism. Look up the definition.
If China said their country is a duck, it wouldn’t make China a duck.
First, because the CCP calls it communist doesn’t mean it is. China’s economy is not planned per se as the USSR was. Does the government and therefore the CCP have centralized planning? Yes, and so does France, Germany and the US, etc.
Calling China a communist country is similar to calling the US a capitalist country and a republic when in fact it is a mixed economy and its form of government is oligarchic.
only uneducated morons would called China w/ 500+ billionaires and countless millionaires COMMUNIST!!
Chinese economical model is not diff from France or Germany!
of course china is not Switzerland!!
Pretty simple. Under communism, you can’t own property or much or much of anything else. You’re told what job you will perform and where to live. Clearly China does not fit that definition currently, years back they did.
WMT, HD, TGT, LOW doing their bidding in plain sight.
=hy they still call the country CCP when clearly they are not communist;
only uneducated morons would called China w/ 500+ billionaires and countless millionaires COMMUNIST!!
IT IS ONE PARTY dictatorship called communist.
and it is pretty much same as two party system in USA or GB! dont see much diff.
Chinese economical model is not diff from France or Germany!
of course china is not Switzerland!!
ps
USSR was communist. people were poor as mouse in church!
It’s taken you guys a while, but you are close to starting to beginning to understand. Yes, China has a Save Face attitude and will never publicly back down under pressure.
Now, how can you use that against them to get a better deal?
Note: Japan had similar cultural “weak spot” during WW2, and it most definitely was used against them. This isn’t a one-off speculative exercise.
We don’t know what will happen. Or the results. Just like 2018. Perhaps we wait to find out.