WASHINGTON, April 22 (Reuters) - U.S. Treasury Secretary Scott Bessent said on Tuesday that he believes there will be a de-escalation in U.S.-China trade tensions, but negotiations with Beijing have not yet started and would be a "slog," according to a person who heard his closed-door presentation to investors at a JP Morgan conference.
Bessent described the current bilateral trade situation as a two-way embargo, and neither side sees the status quo as sustainable, the person said. Bessent added that the Trump administration's goal was not to decouple the world's two largest economies.
Instead, Bessent said that he was hoping for a "big, beautiful rebalancing" of China's economy towards more consumption and the U.S. economy towards more manufacturing, but it was unclear whether Beijing was ready to do that, the source said.
Bessent spoke to a private investment conference in Washington held by JP Morgan Chase JPM.N on the sidelines of the International Monetary Fund and World Bank Spring Meetings. Bloomberg first reported some of his remarks from sources in the room.
Bessent said that the current situation, with 145% U.S. tariffs on Chinese goods and 125% Chinese tariffs on U.S. goods, was unsustainable, saying that a de-escalation would happen over the "very near future" that would provide "a sigh of relief" for markets, the person said.
Bessent's remarks added to positive corporate earnings momentum on Wall Street, which recovered from Monday's sell-off sparked by U.S. President Donald Trump's criticism of Federal Reserve Chair Jerome Powell. Major U.S. stock indexes were up more than 2% in afternoon trade.
Bessent also signaled that the Trump administration would be willing to offer Argentina’s government some financial support if a global shock derailed the South American country's economic recovery, the person said, provided that Javier Milei's government stayed the course on reforms and difficulties were not Argentina's fault.
Bessent last week traveled to Buenos Aires to underscore the Trump administration's support for Argentina's reforms and new, $20 billion loan program from the IMF.