US Treasury secretary Scott Bessent was defiant this week in the face of global financial markets selling off sharply in response to new US tariffs, arguing the new duties were necessary and rejecting the idea that they would cause a recession in the United States.
“I see no reason that we have to price in a recession,” Bessent told NBC’s Meet the Press with Kristen Welker.
Bessent gave no indication that president Donald Trump was willing to back down on the sweeping new tariffs he introduced last week. He said more than 60 countries had called the administration seeking negotiations, but any talks are going to take time.
From the US perspective, other countries “have been bad actors for a long time” Bessent said, adding that the issues could not be negotiated away in a matter of days or weeks. We are going to have to see what the countries offer and if it’s believable,” he said.
“I think we are going to have to see the path forward.” He added: “After decades of bad behaviour you can’t just wipe the slate clean.” Trump too has said on several occasions that the US has been treated badly and countries have “taken advantage of it”.
Bessent’s efforts to calm the market came the day after an additional 10 per cent duty on all US imports went into effect April 5. Additional tariffs, particularly aimed at specific countries, of up to 50 per cent are going into effect on imports for roughly 60 countries. For China, a sweeping 104 per cent was set from April 9.
The announced tariffs will take US import taxes to their highest level in more than a century and have prompted widespread downgrades in growth expectations for the US and global economies. Economists at US investment bank JPMorgan said on April 4 they now expect the US to slip into recession this year.
Trump, who spent last weekend taking phone calls and competing in the club championship at his Florida golf club, has said he wants to reshape the global economy in America’s advantage. He argues that the tariffs will bring a wave of new investments as companies build new factories in the United States, bringing jobs and wealth home to the US.
The main target of his anger is a US trade deficit in goods that topped $1 trillion in 2024. Last week in two trading days US equities lost $5 trillion in value as investors sold off stocks in anticipation of a US and global economic slowdown.
Meanwhile, in China investors were bracing over last weekend for a grim start to the new week as the nation’s markets return from an extended weekend and factor in its retaliation to US tariffs.
A gauge of Chinese stocks listed in the US plunged 8.9 per cent last week, the most since October 2022, amid global market turmoil after Beijing announced 34 per cent tariffs on all imports from the US. That came during a holiday for Chinese and Hong Kong equities, which restarted trading on April 7.
A fall of similar magnitude in the local shares could put multiple Chinese equity gauges, such as this year’s top major global performer, the Hang Seng China Enterprises Index, into a technical correction, and in some cases, close to a bear market. That would end a nascent recovery in the country’s assets, unless mainland-based investors and bargain hunters step in to cap the slide.
The quick retaliation by China, following Trump unleashing the steepest increase in tariffs in a century, will raise the odds of a global recession. The heavy selloff in US-listed Chinese stocks also reflected fears of further tit-for-tat responses between the world’s top two economies. (The writer is our foreign correspondent based in the UK)
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