U.S. Treasury Secretary: "U.S.-China Trade Agreement Imminent"...Hints at Possible Deal Before November

Secretary Besant in CNBC Interview
"Each Meeting Productive... China Also Sees Agreement as Possible"

On September 16 (local time), U.S. Treasury Secretary Scott Besant announced that a trade agreement between the United States and China is imminent. This comes just two months after the United States resumed trade negotiations following the imposition of a 50% ultra-high tariff on India, and as efforts to arrange a U.S.-China summit gain momentum, progress in negotiations with China is also accelerating.

In an interview with CNBC that day, Secretary Besant said, "Each meeting is becoming increasingly productive, and it seems that China also believes a trade agreement is possible," adding, "We will be meeting again soon." He explained that additional negotiations would take place before the U.S.-China "tariff truce" ends in November.

The two countries reached a broad agreement on the sale of the Chinese video-sharing platform TikTok, a major sticking point, during the fourth round of high-level trade talks held in Madrid, Spain, on September 14-15. Secretary Besant further suggested that the two countries are not merely extending the tariff truce but are also discussing actual tariff reductions. Previously, in April, the United States announced reciprocal tariffs on all global trading partners, imposing a total ultra-high tariff of 145% on China by combining the existing 20% fentanyl tariff with a 125% reciprocal tariff. However, through subsequent high-level negotiations, the tariff rates were each reduced by 115 percentage points, and currently, the United States imposes a 30% tariff on China, while China imposes a 10% tariff on the United States.

Secretary Besant also pointed out that low-priced Chinese products are now flowing into countries other than the United States. He stated, "Our trading partners are saying that Chinese products are flooding their markets and they do not know how to respond," adding, "They are somewhat bewildered by this influx." This suggests that China is diverting its low-priced goods to third countries to circumvent the high U.S. trade barriers.

He also explained that the U.S. trade deficit with China is shrinking. Secretary Besant said, "Jamison Greer, the U.S. Trade Representative, projected that this year's deficit will decrease by at least 30%, and that it will decline even more sharply in 2026," emphasizing, "The key is to achieve balance and fair trade." The U.S. trade deficit with China was $300 billion in 2024, but as of July this year, the cumulative deficit stood at $128 billion, indicating a significant annual decrease is expected.

The United States and China held the fourth round of high-level trade talks in Madrid starting September 14. The two sides reached a principled agreement on the sale of TikTok, and President Trump and Chinese President Xi Jinping are scheduled to have a final agreement via phone call on September 19. In April last year, the U.S. Congress passed the "TikTok Ban Act," putting TikTok's parent company, China's ByteDance, in a position where it would have to sell its U.S. operations or face a service suspension in the United States. Although China had previously been negative about selling TikTok, it is reported that Beijing shifted its stance toward agreement in order to facilitate President Trump's visit to China and the summit. As a result, there is a possibility that a trade agreement will be reached before the U.S.-China summit is held later this year. However, issues such as cracking down on the distribution of the narcotic painkiller fentanyl and expanding China's imports of U.S. soybeans remain unresolved, and are expected to be variables going forward.