WASHINGTON (Diya TV) — In a significant move toward reshaping U.S.-China economic relations, Treasury Secretary Scott Bessent said Monday that a new trade agreement marks another step in reducing America’s dependence on Chinese goods. Speaking on CNBC’s Squawk Box, Bessent emphasized that while the U.S. is not seeking a full economic break from China, it is actively pursuing a “strategic decoupling” in sectors deemed critical to national interests.
“We do not want a generalized decoupling from China,” Bessent said. “But what we do want is a decoupling for strategic necessities, which we were unable to obtain during Covid, and we realized that efficient supply chains were not resilient supply chains.”
The agreement, reached over the weekend, introduces a 90-day pause in reciprocal tariffs between the two nations. However, Bessent noted that existing broad-based tariffs, such as the 10% levy on most Chinese imports, will remain. A separate 20% tariff related to fentanyl production and trafficking also stays in effect.
According to U.S. trade data, the U.S. imported nearly $440 billion in goods from China in 2024, contributing to a trade deficit of $295.4 billion. While policymakers have long discussed the need to reduce reliance on cheap Chinese imports, especially in high-risk sectors like semiconductors and pharmaceuticals, progress has been slow and fragmented.
The COVID-19 pandemic highlighted those vulnerabilities. As consumer demand in the U.S. shifted from services to goods during lockdowns, supply chains failed to meet demand, leading to shortages in critical components for cars, appliances, and electronics. The disruption also fueled the highest inflation levels in the U.S. in over four decades.
Bessent pointed to these disruptions as key drivers for current policy. “We are going to create our steel,” he said. “Tariffs protect our steel industry. They work on critical medicines, on semiconductors. We are doing that, and the reciprocal tariffs have nothing to do with the specific-industry tariffs.”
Details of the agreement remain limited, but U.S. officials say it includes a framework to reassess tariffs and create a more predictable trade environment during the pause. The focus is to strengthen domestic manufacturing capabilities without provoking a broader economic confrontation with China.
On a parallel front, Bessent noted progress on the fentanyl crisis, which has strained diplomatic relations in recent years. “Chinese officials are now serious about assisting the U.S. in stopping the flow of precursor drugs,” he said. While he did not provide a firm date for follow-up talks, he indicated that negotiations would resume in the coming weeks.
The trade pact represents a delicate balancing act for the Biden administration, which has been walking the line between promoting national security and maintaining global economic stability. With elections approaching and economic anxieties high, the White House is aiming to show progress on both supply chain resilience and the fight against illicit drugs.
Though temporary, the 90-day pause may serve as a pivotal moment in recalibrating the world’s most consequential bilateral trade relationship. The coming weeks will likely determine whether this marks the beginning of a new economic equilibrium or simply a brief détente.
