Treasury Secretary Scott Bessent testified today before the House Ways and Means Committee on the sweeping tariffs imposed by President Trump.
Bessent left London late after trade talks with China and returned to Washington in the early hours of the morning.
Speaking to the press before leaving the historic Lancaster House near Buckingham Palace where the talks were held, Bessent said regarding the China talks, “We had productive talks for two days and the process is still ongoing.”
While the main agenda of today’s session was Treasury Department priorities, Bessent’s information on trade talks with China generated considerable interest among committee members.
The main agenda of the talks was for China to increase its rare earth element exports to the United States in exchange for the lifting of US export restrictions on chip design software, jet engine parts, chemicals and nuclear materials.
Some of the highlights from Bessent’s prepared speech were as follows:
- “Rebalancing is possible if China sticks to the agreement.”
- “Thanks to Trump, there has been a significant improvement in inflation.”
- “Trump policies were effective in slowing down price increases.”
In his opening remarks, Bessent said federal tax revenues increased by 9.5% in April and 14.7% in May compared to the previous year, arguing that these data undermine criticism that the Trump administration’s tax cuts would reduce revenues.
“Treasury completed its most successful tax filing season in years, increasing efficiency and reducing costs at the IRS,” he said.
Bessent also highlighted the regulations in the new tax law that encourage manufacturing in the U.S. “We are providing 100% depreciation for new and expanded factories. This law will start the era of manufacturing again in America,” he said.
“This legislation will provide predictability for individuals and businesses and increase economic momentum. It aims to strengthen the working and middle classes and revitalize American manufacturing,” he said.
Bessent, in his assessment of the talks in London, said, “I got back at midnight, but these talks will not only stabilize the economic relationship, but also make it more balanced.” Stating that China should move from overproduction to a consumption-oriented model, Bessent said, “If China sticks to the principles of the agreement we set out in Geneva last month, a great, beautiful rebalancing can take place between the world’s two major economies.”
Bessent also said that inflation was under control and growth was “inflation-free.” He said, “We will repeat this success.”
Noting that China has “the most unbalanced economy in history” and that there is a serious contraction in the real estate sector, Bessent said that the US has received “unimaginably good” offers from other trading partners, and that these offers include reducing non-tariff barriers.
When California Representative Linda Sanchez asked for details on the agreement with China, Bessent said she returned at 4 a.m. and that the agreement was still “under development.” He also said that the Chinese delegation questioned the validity of the initial agreement during the Biden administration.
Bessent also warned that if the tax law is not passed, there could be “a financial crisis the likes of which has not been seen since 2008.”
*This is not investment advice.
