WASHINGTON — U.S. Treasury Secretary Scott Bessent traded policy complaints with Chinese Vice Premier He Lifeng on Friday, with Bessent telling Beijing to do more to curb fentanyl trafficking and rebalance its economy, and He voicing concerns about President Donald Trump’s new tariffs, the two governments said. The top economic officials from the world’s two largest economies agreed to keep up communications, the Treasury said in a readout of the introductory video call. “Secretary Bessent expressed serious concerns about the PRC’s counternarcotics efforts, economic imbalances, and unfair policies, and stressed the Administration’s commitment to pursue trade and economic policies that protect the American economy, the American worker, and our national security,” the Treasury said, using the acronym for China’s official name, the People’s Republic of China. Earlier, Chinese state media reported that He expressed concerns to Bessent over U.S. tariffs and trade restrictions on China during the call. The two sides had an “in-depth” exchange of views on important issues in China-U.S. economic relations, and both agreed to keep communicating on matters of mutual concern, according to a readout released by Chinese state media. He, the lead China-U.S. trade negotiator on the Chinese side, and Bessent recognized the importance of bilateral economic and trade relations, the readout said. More tariffs China and the United States are seeking to manage their relationship as they stand on the precipice of a renewed trade war. Trump imposed 10% tariffs on all Chinese goods in early February, citing China’s failure to stanch fentanyl trafficking. Beijing retaliated by imposing targeted tariffs of up to 15% on some U.S. imports, including energy and farm equipment, and put several companies, including Google, on notice for possible sanctions. Trump has also planned further reciprocal tariffs for all countries that tax U.S. imports, a move that is likely to further escalate global trade tensions. During his election campaign, Trump threatened 60% tariffs on all Chinese imports. Trump said earlier this week he expected Chinese President Xi Jinping to visit the U.S., without giving a timeline for such a trip. Bessent said on Thursday he would tell his Chinese counterpart that China needed to rebalance its economy and rely more on domestic consumption for growth and less on investment and exports. “They are suppressing the consumer in favor of the business community,” Bessent told Bloomberg Television. Similar arguments The U.S. had a $295.4 billion goods trade deficit with China in 2024, down from a peak of $418.2 billion in 2018, the year Trump began imposing new tariffs on some $370 billion of Chinese imports. But last year’s deficit rose $16.3 billion from 2023 as Chinese exporters rushed to beat a new round of Trump tariffs. Bessent’s predecessor, former Treasury secretary Janet Yellen, met several times with He in recent years and lodged similar complaints about China’s state-led economic policies. She argued during a trip to China last year that those policies were leading to excess production capacity that was threatening the viability of firms in the U.S. and other market economies, a warning that laid the groundwork for former President Joe Biden’s steep tariff hikes on electric vehicles, semiconductors and solar products. He and other Chinese officials never accepted U.S. excess capacity assertions, arguing that China’s EV and other key industries are simply more competitive.
