Bessent urges G20 to re-examine trade terms with China over global imbalances
U.S. Treasury Secretary Scott Bessent has said he will encourage G20 members to re-examine their terms of trade with China in order to shrink global imbalances and press Beijing to rebalance its economy away from exports and toward domestic consumption.
In an interview ahead of a G20 finance leaders meeting, Mr. Bessent said the current volume of Chinese exports was unsustainable, even though the U.S. direct trade position with China was “rapidly improving.”
“The world cannot have a China with a $1.2 trillion trade surplus,” Mr. Bessent said. “In China, the economy is quite weak, and they are trying to export their way out of it, and they need to rebalance their economy.”
Mr. Bessent’s push for a coordinated trade response comes as legal setbacks force the U.S. to rebuild its tariff policy. Those tariffs had sharply reduced imports from China but have also led to a diversion of Chinese exports to other regions, especially Europe and Latin America.
The U.S. has walled off its economy from many Chinese goods with high tariffs and outright bans, including on autos. Mr. Bessent said he had told other industrial economies last year that they would face pressures from the surge in Chinese imports, adding that “now they are confronted with some very stark choices.”
He said it would be up to other countries to give China an incentive to shift away from exports and strengthen its chronically weak domestic demand. “The rest of the world is going to have to examine their terms of trade with China,” he said.
The U.S. is pushing for a G20 joint statement on reducing trade and current account imbalances. China’s embassy in Washington could not immediately be reached for comment on its view of the effort.
Tariffs imposed since U.S. President Donald Trump returned to office in 2025 have helped cut the U.S. trade deficit with China by a third in the first six months of 2026 compared with the same period in 2025, to $73.9 billion, according to U.S. Census Bureau data. Some of that reduction was due to an acceleration of imports in early 2025 as importers tried to beat anticipated tariffs.
Although some economists and European leaders have called for a coordinated effort to strengthen China’s yuan, Mr. Bessent questioned the effectiveness of such a move. The International Monetary Fund has assessed the yuan to be undervalued by as much as 21%.
Suggestions that a new “Plaza Accord” — a reference to the 1985 agreement to strengthen currencies against the dollar — was the answer to reducing imbalances were misguided, he said. He called this “an easy way to get around dealing with the real trade problem,” which he identified as excessive Chinese industrial subsidies and weak domestic demand.
Mr. Bessent said it was unclear whether he would meet with Chinese Vice-Premier He Lifeng in person ahead of a White House meeting between President Trump and Chinese President Xi Jinping scheduled for late September.
Ahead of the summit, U.S. and Chinese officials would press forward with dialogues on potential tariff reductions on non-strategic goods and on artificial intelligence guardrails aimed at keeping powerful AI models out of the hands of non-state actors, Mr. Bessent said.
“I think that there probably are $30 billion of non-strategic, non-critical goods on each side that we could take the tariffs off,” he said.
The September summit comes as the U.S. has been rebuilding Mr. Trump’s tariffs after the U.S. Supreme Court struck down broad duties imposed under an emergency law, including 20% on Chinese imports. In July, the administration imposed a 12.5% tariff on Chinese imports under an anti-forced labour trade investigation. It is poised to add more tariffs related to excess industrial capacity under a separate probe.
The U.S. Treasury chief also said he planned to hold a bilateral meeting on the sidelines of the G20 gathering.
