This would be ‘devastating’: Treasury Sec. Bessent updates on China tariff deal

Summary

Fox Business hosted Treasury Secretary Scott Bessant to discuss the newly signed minerals deal between the US and Ukraine, emphasizing its economic and geopolitical significance. The deal, largely conceived by President Trump, is designed to bolster both nations' economies post-conflict, ensuring economic security translates into national security. Bessant elaborated on ongoing trade negotiations with China, aiming to recalibrate skewed trading tariffs imposed previously. The discussions highlighted themes of economic partnership, manufacturing revival, deregulation, and negotiating trade agreements that potentially hinge on strategic uncertainty. Emphasizing America's innovation and resourcefulness, Bessant envisions stronger future trade and economic relations globally.

Highlights

• Secretary Bessant details a groundbreaking minerals deal focusing on rare earth elements with Ukraine ensuring economic advantages for both nations. 🌍
• President Trump's leverage in global deals—his meeting in Vatican with President Zalinsky playing a key role! 🏛️
• Innovative economic partnerships: Aligning US and Ukrainian interests without oppressive debt structures! 🔗
• Ongoing talks with China seek tariff deescalation, impacting global trade dynamics. 📉
• Strategic uncertainty as a negotiating tool in international trade—President Trump's unique approach! 🎲

Key Takeaways

• Big news! The US and Ukraine ink a deal on rare earth minerals, boosting mutual prosperity! 🇺🇸🇺🇦
• President Trump’s strategies: Peace and prosperity drive international diplomacy! ✌️
• China tariffs in the spotlight: Major talks for potential deescalation ahead! 📉
• Economic partnership vs. Chinese debt traps: Innovative pathways for US-Ukraine collaboration! 🤝
• American innovation: Attracting trillions in industry commitments! 💡

Overview

In a riveting session on Fox Business, US Treasury Secretary Scott Bessant laid out the robust terms of a new minerals deal with Ukraine, a move that's poised to unlock significant economic synergy between the two nations. This deal is central to a dynamic strategy devised by President Trump aimed at leveraging the rare earth elements vital for numerous industries while ensuring economic and national security enhancements on both fronts.

The conversation shifted towards ongoing trade tensions with China, with Bessant highlighting the need for tariff deescalation and honoring past trade agreements. Despite steep current tariffs, the objective remains to rebalance trade, focusing on fair agreements that promote both nations' prosperity. Talks emphasize not only tariff reductions but also address non-tariff barriers hampering US business operations in China.

A peek into international trade implications revealed substantial investments aimed at energizing American innovation are underway, signifying confidence in US economic leadership. Discussions also circled around deregulation and potential shifts in the global economic order, with a nod to strategic uncertainty as a hallmark of President Trump's negotiation methodology. Together, these measures align with a vision of revitalizing American manufacturing and economic dominance.

Chapters

• 00:00 - 01:30: Introduction and Significance of the US-Ukraine Deal The US has signed a significant minerals deal with Ukraine, granting the US access to Ukraine's crucial rare earth minerals. The agreement allows Ukraine to determine the areas available for prospecting, exploring, and producing natural resources within its territory and waters. US Treasury Secretary Scott Bessant is mentioned as being involved.
• 01:30 - 04:00: Details of the US-Ukraine Deal The chapter discusses a significant deal between the US and Ukraine, emphasizing its importance to both nations. Secretary comments that it aligns with President Trump's agenda of peace and prosperity, indicating a positive development for the international relationship. Maria, the host, congratulates the Secretary on the achievement, highlighting the importance of the agreement.
• 04:00 - 07:00: President Trump's Influence on the US-Ukraine Deal In this chapter, the discussion centers around President Trump's strategic influence on the US-Ukraine deal. Initially conceptualized in February, the plan was presented to Ukrainian President Zalinski by a US envoy. Despite experiencing some challenges, the deal, which was signed recently, is deemed mutually beneficial and innovative. The chapter contrasts this strategy with the simpler alternative of providing Ukraine with additional loans, which would have increased their financial burden.
• 07:00 - 09:00: Military Support and Financial Dynamics of the US-Ukraine Deal The chapter discusses the potential financial dynamics and military support involved in the US-Ukraine relationship. It highlights concerns about the economic burden on American taxpayers and the need to maintain public support. It is suggested that US businesses, practices, and capital could play a significant role in Ukraine's post-conflict economic recovery.
• 09:00 - 15:00: China Tariffs and Trade Deal The chapter discusses the negotiations involving China Tariffs and a trade deal. It highlights President Trump's role in creating leverage and closing the deal. It mentions a pivotal moment at the Vatican and a significant incident at the White House where a signing was supposed to happen, but was disrupted by President Zalinsky.
• 15:00 - 18:30: US-EU Trade Relations The chapter titled 'US-EU Trade Relations' discusses a significant event at the Vatican that contributed substantially to the progress of US-EU relations. The discussion highlights President Trump's strategic move, likening it to dealing a 'royal flush' in a diplomatic sense. This move significantly strengthens Ukrainian-American ties and showcases the solidarity between the Ukrainian people and the American people, suggesting a unified front to the Russian leadership.
• 18:30 - 23:00: Automobile Tariffs and US Economic Strategy The chapter titled 'Automobile Tariffs and US Economic Strategy' discusses recent developments involving President Trump. It touches on US military support for Ukraine amidst its conflict with Russia and speculates about trade deals, possibly mentioning a significant speculative percentage related to these discussions. The conversation is indicative of ongoing strategic economic planning and international relations.
• 23:00 - 32:00: Business Leaders' Meeting and Economic Outlook The chapter covers a meeting of business leaders discussing economic outlooks, with a focus on an economic partnership intended to accelerate Ukraine's economy. A key topic includes revenue allocation from rare earth minerals, with the U.S. managing half the value of these resources.
• 32:00 - 35:00: Interest Rates and Economic Policies The relationship between economic security and national security is emphasized, highlighting that maintaining a strong economy is crucial for national defense. The discussion focuses on how Ukraine, post-conflict, can strengthen its national security through economic means. The deal being discussed is an extensive economic partnership that goes beyond just rare earth materials, encompassing infrastructure and energy. This partnership is seen as mutually beneficial, offering significant opportunities for both parties involved.
• 35:00 - 37:30: Deregulation and Economic Growth This chapter discusses the nature of economic deals, particularly between powerful and less powerful nations. It highlights the non-exploitative relationship between the United States and Ukraine, where economic growth and prosperity for Ukraine are tied to benefits for American interests. This alignment of economic goals is seen as a strategic move against Russian interests, underlining a cooperative rather than dominative approach in international economic relations. Overall, the chapter suggests that deregulation and international economic collaboration can lead to mutual prosperity and serve as a strategic geopolitical tool.

This would be ‘devastating’: Treasury Sec. Bessent updates on China tariff deal Transcription

• 00:00 - 00:30 Welcome back. Well, the US has signed the long awaited minerals deal with Ukraine, giving the United States access to Ukraine's key rare earth minerals. The agreement states, quote, "Ukraine retains the right to determine the areas within the territory as well as its territorial waters, exclusive economic zone, and continental shelf to be made available for the exercise of the activities of prospecting, exploring for and producing natural resources." US Treasury Secretary Scott Bessant is with
• 00:30 - 01:00 me right now with more. Mr. Secretary, thanks so much for spending the time and joining me this morning. Good morning, Maria. Congratulations on this deal. This is a big deal. Can you walk us through what's most important here? Well, Maria, it's a big deal. And I I have two words for the uh President Trump's agenda, peace and prosperity. And this moves uh both America and Ukraine in that direction. Uh the the deal was something that President Trump
• 01:00 - 01:30 conceived back in February. He dispatched me to Kev to present it to President Zalinski. So we've been working on this. This was first presented to the Ukrainians on February 10th. Uh we signed yesterday. Uh as you know, there was a bit of turbulence in between, but I think that this is win-win for both sides and it's very innovative. Uh the easy thing to do would have been to give the Ukrainians more loans, pile on more debt, um they
• 01:30 - 02:00 tax the American people more and you know lose the support of the American people here that the Ukrainians can see a path to economic prosperity once this conflict ends and the US US businesses, US best practices, US capital will be part of that. Yeah. I I mean, you know, we were all wondering if you were going to be able to close this. I understand how important these rare earth minerals are. President Trump spoke with Zalinsky
• 02:00 - 02:30 at the Vatican in in that iconic shot that we're looking at right now. Was that conversation what closed this deal? Uh we we were moving along, but as always, all these deals are the president's deals, and no one creates leverage like he does. No one closes like he does. uh you know there was the blowup at the White House where we were supposed to sign that day and President President Zalinsky created the blowup. Um now the President Trump and the
• 02:30 - 03:00 meeting at the Vatican went a long way towards pushing this over the goal. You know as President Trump said in the oval that day to Zalinski, you have no cards. Well, you know what? The President Trump has now dealt him the uh, you know, a royal flush because now we can take the these cards and go and show the Russian leadership that the that there is no daylight between the r between the Ukrainian people, the American people,
• 03:00 - 03:30 between our goals. So, this is very innovative and you President Trump as always pushed this across himself. Yeah. Wow. What a deal. So, no daylight. Does that mean that the US is going to provide military support, increased military support for the Ukrainians in this war with Russia? That's number one. And number two is when we were all speculating about this deal, there was some uh speculation that 50% of the
• 03:30 - 04:00 revenues would go into a a fund that the US had access to in terms of the value 50% of the value of those rare earth minerals. Can you give us a sense of what the um the dynamics are in terms of the financials here? Uh sure. So uh you know this this is an economic partnership. So uh we are going to the accelerate the Ukraine economy and as the president says as I always say
• 04:00 - 04:30 economic security is national security national security is economic security. So a strong Ukraine post this conflict the will help the Ukrainians the maintain their national security. In terms of the deal, Maria, this is a total economic partnership. This isn't just rare earth. It's infrastructure, it's energy. Uh so you know there's the opportunity here for both sides to really win. And you know again what this
• 04:30 - 05:00 isn't it isn't one of these rapacious Chinese deals where once where the more powerful side goes in says here sign away your na national patrimony uh we don't make the American people don't make any money if the Ukrainians don't prosper. So now we are fully aligned in terms of economics and again I think this is a strong signal to the Russian leadership and it gives President Trump
• 05:00 - 05:30 the the ability to now negotiate with Russia on even a stronger basis as opposed to the the daylight that had been previously created between the US and Ukraine. Okay. I I'm going to come back to this because you just mentioned China and I want to ask you about China because I understand that with regard to these trade deals that you all are working on. You've been focused on the China end of it and and some of your colleagues are are looking at other countries. Secretary, what exactly do
• 05:30 - 06:00 you and President Trump want to see from China in terms of getting these tariffs down? The president put in this 145% tariff. China comes back with a retaliation of 125%. What do you want China to do? Well, I think this is going to be a multi-step process, Maria. I think first there will need to be a deescalation the on these very large tariffs. 145 and 125 are not sustainable
• 06:00 - 06:30 on the Chinese side. We saw some very poor GDP numbers out of them uh yes out of China yesterday. We're now seeing very large estimates of job growth loss from 5 to 10 million jobs. So the Chinese economy the is slowing down substantially here. So what we will first want to see is a deescalation. uh you we will likely revisit the purchase agreements that were put under
• 06:30 - 07:00 uh put together uh in the first China trade agreement in January of 2020 to make sure that the Chinese are honoring those agreements and then we are going to push for uh fair trade with China. Uh they are the most unbalanced imbalanced economy in the history of the world and they need to rebalance. Now, Maria, the big deal that could be done here is President Trump is
• 07:00 - 07:30 re oriented the US toward a manufacturing economy, taking us back to the strength that's been sapped over the past several decades. Everyone knows that China needs to rebalance towards more consumption. So, if we could rebalance together, then that would be the big deal. But in the meantime, we we're going to bring down these the unfair trade barriers and you hold them to the agreements that they previously signed. Okay? So, they have to they have
• 07:30 - 08:00 to keep their commitments that they already committed to President Trump in his first term because they stopped buying the agriculture that they said that they would under Joe Biden. We know that. And you say you want them to buy more from America. You got to up the consumption. What about the non-tariff barriers? What what what about some of the things that China does like the surveillance of America, buying land near our military installations, all of the other non-tariff barriers that President Trump has spoken about
• 08:00 - 08:30 bullying our navy ships. Well, look, Maria, uh there there's a whole range of the bad behavior by the Chinese. We're going to be focused on trade. uh but that the non-tariff trade barriers uh for China are especially insidious. China actually has low tariffs that if you look at the stated tariffs, it's just impossible for US companies to do business there. And when
• 08:30 - 09:00 they do, there uh there's substantial IP theft, there's cyber hacking. So, you know, everything is on the table for the economic relationship. Uh I am confident that the Chinese will want to reach a deal. And as I said, this is going to be a multi-step process. First, we need to deescalate and then the over time we will start focusing on a larger trade deal. Okay, very very important
• 09:00 - 09:30 information there. And the president said there's a very good chance that the US makes a deal with China. Do you see that happening within a couple of weeks, a couple of months? What's your timing, Mr. Secretary? Well, again, Maria, as I said, that the Chinese need to deescalate these high tariffs because there is the equivalent of an embargo and the Chinese business model is built on selling cheap goods to the US. They sell us about five times more than we
• 09:30 - 10:00 sell them. So, uh, you know, their factories are closing down as we speak. We're going into, uh, the holiday season. uh orders are placed for that now. So uh if if those orders aren't placed, it could be devastating for the Chinese and and Secretary uh Commerce Secretary Lutnik yesterday said that you're leading these negotiations and he's dealing with other with other countries, but there's lots of speculation that we're close on India
• 10:00 - 10:30 and and other is it fair to say that we'll see a deal with India and South Korea before we see something with China? Well, again, Maria, uh these these are multi-step deals uh because of the deescalation. Could we see a deescalation? Uh because the Chinese need to deescalate sooner than the other deals perhaps. Uh but the other deals are moving along well. Uh I am concentrating on our Asian trading partners. So, we're meeting with the
• 10:30 - 11:00 Japanese delegation today. We've had some very good meetings with Korea. Vice President Vance was in India. I had very good meetings with the Indonesian finance minister. So, you know, we we are moving quickly. As as I said yesterday, uh President President Trump is doing peace deals, trade deals, and tax deals. And you we're also approaching what is the biggest deal we're going to do this year. And it it's
• 11:00 - 11:30 the tax deal, as President Trump calls it, one big beautiful deal, uh, to make the 2017 tax cuts and jobs act permanent, and then add many of the president's campaign promises onto that, bring back full expensing for equipment for American factories. And we want to add uh full expensing for the structures for the factories. and you've done a lot of work on that, meeting with congressional lawmakers uh on on this deal. Uh do you expect the big beautiful
• 11:30 - 12:00 bill to be on the president's desk for signage by July 4th? Uh leader Thun said that yesterday. So uh I have great confidence in him. Uh, Speaker Johnson has the gotten uh his side of the building to move with great speed and he's expecting to that the House uh portion of the bill will be done on or about Memorial Day. So, it's moving very quickly. And again, this is President
• 12:00 - 12:30 Trump's leadership. I want to commend Speaker Johnson, Leader Thoon, and then President Trump's leadership in helping them hold their coalitions together. Uh it it's going very well. Secretary, uh we've been hearing reports that the European Union is going to present something next week. Have you spoken with your counterparts in in the European Union about a trade deal and lowering their uh tariffs there? What would you like to see from the EU? Uh,
• 12:30 - 13:00 Maria, I'm not direct directly involved with the EU negotiations at present. Last week was IMF World Bank week in DC. I met with uh my my counterparts. We had a wholesome discussion about their tariffs, their non-tariff trade barriers, and you know, they they were complaining about the the tariffs that we put up. And I said, "Well, if they're so bad, why do you have them? Why do you have a 10% auto tax? Why are you why why do you have what's called a digital
• 13:00 - 13:30 service tax on our internet companies? You know, they they just see a big pot of money and they're going after it. So, uh we're going to bring those down. You know, all all I hear about is how special the French farmers are. Well, I'm sure the French farmers are special, but American farmers are special. I'm an American farmer. Yep. All great points. And you mentioned the auto situation. We're about to speak with the CEO of General Motors. And one of the issues in the auto sector uh is the fact that
• 13:30 - 14:00 there's so many tariffs. There's tariffs on aluminum and steel and there's tariffs on auto parts and tariffs on automakers. One reason that President Trump the other day softened the blow there for the automakers. But will you be able to come up with some more clarity in terms of what tariffs are going to look like in the coming 3 to 6 months so that business has that confidence and clarity it needs to make the investments that they're expecting? One Wall Street uh uh uh source the
• 14:00 - 14:30 other day said to me, "We're talking about a freeze in the capital markets. People don't have clarity, so they're not investing the way they'd like to." Well, M Maria the as a for as a uh recovering Wall Street person, I I can tell you Wall Street people like instant gratification. Uh President Trump's agenda is an agenda for for the next one, two, three uh decades in the US of bringing back manufacturing. And you
• 14:30 - 15:00 know, we have a very uh what I call a barbell economy. On one side, we are the envy in the world of financial services, tech. On the other side, uh we're a great natural resource economy uh driven by energy. We're going to keep the energy dominance uh going. And what President Trump is doing is looking to bring back the precision manufacturing jobs that have left the over the past decades. And I think we will close the
• 15:00 - 15:30 uncertainty aperture more and more every day, every week on these tariffs. But you we we didn't get here overnight. We're not going to fix this overnight. But I do think uncertainty will go away. But you know, also, Maria, I point out, you know, in game theory, strategic uncertainty is a negotiating tactic. And no one does it better than President Trump. We don't want to uh you know we we don't want to put our cards on the table before we start negotiating. But I
• 15:30 - 16:00 can tell you we're we're on a path. The path is the uh going to be worth it when we get there. And u you know for the short term y that I think everyone should take a deep breath as your previous guest said the market did this incredible round trip in April. Two weeks, two weeks ago, all I saw the were headlines that all I saw were headlines that said the worst worst week the in
• 16:00 - 16:30 April since the Great Depression and you know we we finished flat on the month now and then we had a huge rally and then we had a huge rally but you didn't see the same headlines about the rally. Look, that deal making savvy was on full display yesterday uh when President Trump and you were with business leaders. I want to take a short break and come right back and ask you about uh the business leaders and what happened in that room yesterday. Secretary, stay with us. We're talking with Secretary Scott Basset and we'll be right back with more. And we're back with Treasury
• 16:30 - 17:00 Secretary Scott Besson. Secretary, we were just talking a moment ago about that meeting with business leaders at the White House. You met with many of those leaders in the Oval Office yesterday. Did you get a sense that they are going to in fact move supply chains into America and when? Uh well, Maria, we've seen substantial commitments, the se seven or eight trillion between industry and sovereign funds, foreign investors wanting to come in and there's a great sense of optimism. Uh the the
• 17:00 - 17:30 meeting yesterday was about American innovation. No one innovates uh like Americans. The American economy is the best place for capital in the world. And what we are doing is putting more certainty in place. We've got the the tax bill uh which is going to uh have certainty. We're going to have permanence in the tax bill. Uh we are cutting energy costs. So we will be the lowcost energy provider uh for business. And then we're providing uh substantial
• 17:30 - 18:00 deregulation uh for these businesses which you the the main thing that we heard was that they were just buckling under all the Biden era regulations. Yeah. Yeah. And and and of course that's that three-legged stool that you talk about all the time. But but yesterday we saw a contraction in the economy. The GDP came out down 3ten of a percent. The first read of the first quarter GDP. I know that we'll see updates to that GDP, but Mr. Secretary, can can you walk us
• 18:00 - 18:30 through what happened there and does this indicate or suggest that we could in fact see a recession this year? Uh, no, Maria, I as NEC director Hasset said, uh, we expect to see the number revised. It was a first quarter number. Uh, the a lot of it may have been due to inventory stocking. I think there were some anomalies in the number as we pick it apart. And remember too, some of this
• 18:30 - 19:00 is the economy that that we inherited from the the Biden era with the unsustainable spending. So, you know, the other thing that we're doing is we're reprivatizing the economy. We had we've had a substantial increase in manufacturing jobs. Uh household consumption is still very strong. when I when I spoke to uh the credit card companies, the banks, they tell me the consumers in great shape. So that number
• 19:00 - 19:30 does not represent what's going on in the economy. It it was it was a good first quarter despite the weakness we inherited. Secretary, what what about interest rates? You look at the 10-year yields right now, all the way down to 4.1%. You look at the dollar recently. Okay, so it's up now to a two-week high. uh but it's been plummeting on worries about that. How would you assess those markets? Uh sure. So uh Maria, let's let's go through them one by one.
• 19:30 - 20:00 There's been a substantial decrease in the tenure uh since beginning of the year, but especially since January 20th, and President Trump and I are targeting that point on the curve. Uh we are seeing that two-year rates are now below Fed funds rates. Uh so that's a market signal that they think uh the Fed should be cutting. We've had some great inflation numbers. Uh we had the biggest decrease in energy prices for a single
• 20:00 - 20:30 month the in years. Uh energy is down substantially. I am told that in parts of Florida, uh gasoline is $1.93 and that's an automatic tax cut for the American people. So, we're probably going to see a lot more uh car travel this summer. And you know, I so I I think things are in good shape. And you know, as you said, uh the mar the market uh the interest rate market was
• 20:30 - 21:00 moving around substantially in April. I think that was a lot of my former uh Wall Street uh brethren going through thea the occasional what's called a bar shock. They got too much leverage and they have to delever. And you know, Maria, few weeks ago when the tenure was at 390, all all I heard was, "Well, Secretary Besson got what he wanted. The 10 years down, but it's down for the wrong reason. Then it spiked up to 450, 455. Oh, we're on the verge of a bond
• 21:00 - 21:30 meltdown." And, you know, it it just turned out that it it was some overleveraged market players. Now, we're continuing on the downward path, and I think our policies are going to uh bring down inflation, have very strong non-inflationary growth like President Trump had in his first term. Okay. And and real quick before you go, you've talked about this three-legged stool that's trade, tariffs, and deregulation. Where specifically will will the
• 21:30 - 22:00 deregulation happen? Is that is in the in the oil sector? Uh it it's it's across the all parts of the economy. Maria, you pre President Trump in his first term gave the directive that for every one new regulation, three had to be taken out. Turned out seven were taken out. Uh in this term, uh for every one new regulation, 10 have to be taken out. Uh we think that there's going to be an immediate savings for American households, about $2,000 per household, and I believe that could be
• 22:00 - 22:30 substantially higher. So, we're going to see uh real income growth for households to uh remedy this affordability crisis we were left with. Mr. Secretary, we so appreciate you spending the time with us this morning and walking us through all of these very important topics. Thank you, sir. Good to see you, Maria. and to you, Secretary Scott Besson.