Treasury Secretary Scott Bessent on Tuesday (Apr 8) said that the US holds a substantial advantage over China as the two nations engage in a growing trade war. 

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“I think it was a big mistake, this Chinese escalation, because they’re playing with a pair of twos,” Bessent told CNBC during an interview. “What do we lose by the Chinese raising tariffs on us? We export one-fifth to them of what they export to us, so that is a losing hand for them.”

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Trump’s reciprocal tariffs

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Bessent’s remarks come a day before the US is set to raise its levies on China and several other nations as part of the reciprocal tariffs. The duties will bring US trading allies to the negotiating table and jobs back to the US, said the treasury secretary.

He added that so far Japan has been at the forefront of nations willing to negotiate, and the White House expects many others as well.

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“I think you are going to see some very large countries with large trade deficits come forward very quickly,” Bessent said. “If they come to the table with solid proposals, I think we can end up with some good deals.”

“If we put up a tariff wall, the ultimate goal would be to bring jobs back to the US. But in the meantime, we will be collecting substantial tariffs,” he said. “If we’re successful, tariffs would be a melting ice cube, in a way, because you’re taking in the revenues as the manufacturing facilities are built in the U.S., and there should be some level of symmetry between the taxes we begin taking in with the new industry from the payroll taxes as the tariffs decline.”

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China’s vows to ‘fight to the end’

While about 70 countries have reached out to the White House for talks, he said, China has vowed to “fight to the end” and has imposed 34 per cent tariffs on US imports in response to US President Donald Trump’s “blackmail”.

The US president has threatened Beijing with additional 50 per cent duties on Chinese goods if they do not withdraw the reciprocal tariffs by Tuesday (Apr 8).

Also read | China on tariffs: 'US seeking hegemony in the name of reciprocity in trade war'

If the US president moves forward with his plans to impose the additional tariffs, unless China withdraws its retaliatory levies on the US, the total new duties on Chinese goods this year could rise to 104 per cent.

(With inputs from agencies)