Bessent: China Will Absorb Tariffs, Inflation Unlikely to Rise

U.S. Treasury Secretary Scott Bessent expressed confidence on Sunday that President Donald Trump’s proposed tariffs would not lead to increased inflation, suggesting that China would bear the brunt of the costs. These statements were made just two days prior to the scheduled implementation of the tariffs on Tuesday. How might this impact the economic relation between the two countries?BR

President Trump’s plan includes imposing 25% tariffs on imports from both Mexico and Canada. Furthermore, the U.S. intends to levy an additional 10% duty on Chinese imports, adding to the existing 10% tariff implemented on February 4th. Why is this strategies?BR

Concerns have been voiced by some economists regarding the potential for these tariffs to trigger inflation and consequently maintain elevated interest rates into 2026.How the goverment explain it?BR

China’s Business Model Will Offset Tariff Impact

During an interview on CBS’ “Face the Nation,” Bessent was questioned about the potential consequences of the tariffs on the average American household.BR

“Well, we don’t know yet because it’s path-dependent, but what I can tell you is that I’m not worried about China,” Bessent responded. He confidently stated that China would cover the costs of the tariffs due to its export-oriented business model, effectively “eating” any tariffs imposed. What is the model that will be used to do it?BR

China’s Ministry of Commerce, however, firmly opposed Trump’s latest tariff increase on Friday, vowing to retaliate as needed. This stance follows China’s previous response to the initial round of tariffs in February, where they increased duties on specific U.S. energy imports and added two U.S. companies to an unreliable entities list. How China’s Goverment will be respon?BR

Potential Retaliation from China

Experts have indicated that China might implement similar measures in response to the newly imposed tariffs. A spokesperson from the Ministry of Commerce previously communicated to CNBC that “If the U.S. insists on its own way, China will take all necessary countermeasures to defend its legitimate rights and interests.”Where and when it will be inform?BR

Bessent also addressed his prior comments regarding Mexico’s proposal to match U.S. tariffs on China as a means of avoiding being subjected to Trump’s tariffs. He further encouraged Canada to consider adopting a similar approach.BR

“We’ll see. The Mexican leadership has offered to do that,” Bessent mentioned. “We haven’t heard from the Canadians, but I think that would be a very good start.”BR

He speculated that announcements from the involved countries could be made on Tuesday, or alternatively, the tariff wall might be erected, leading to further developments. Who, What,and How?BR

The Future of Tariffs and Trade Relations

The situation remains fluid, with the potential for various outcomes. When the tariff was erected?Bessent’s confidence in China’s ability to absorb the tariffs contrasts with the concerns of some economists who foresee potential inflationary pressures. China’s firm stance against the tariffs and its history of retaliatory measures suggest a likely response, potentially escalating the ongoing trade tensions. The proposals from Mexico, and potentially Canada, to match U.S. tariffs on China offer a possible avenue for mitigating the impact, but the ultimate outcome remains uncertain. The coming days and weeks will be crucial in determining the trajectory of trade relations between the U.S., China, Mexico, and Canada. What will happen in the future?BR

The unfolding events highlight the complexities of international trade and the potential ramifications of tariff policies. The interplay between economic strategies, political motivations, and global interconnectedness creates a dynamic environment where outcomes are difficult to predict with certainty. 5w and 1h are important.As the situation evolves, careful observation and analysis will be essential to understanding the long-term consequences for all parties involved.Will the strategy succes or not, how it will be?BR