Following is the unofficial transcript of a CNBC interview with United States Treasury Secretary Scott Bessent on CNBC’s “Squawk Box” (M-F, 6AM-9AM ET) today, Monday, April 28.
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Treasury Secretary Scott Bessent: It's up to China to de-escalate trade tensions
JOE KERNEN: Alright let's get right to our newsmaker of the morning, and the latest on everything, not just tariff negotiations with China, Treasury Secretary Scott Bessent is with us. And it's good to see you, Mr. Secretary. Welcome.
SCOTT BESSENT: Good morning. Joe.
KERNEN: If you see any other reporters yelling next to you like last time, you just tell them from us that they need to move it over or do something. I don't hear any, I think we're looking good at this point.
BESSENT: All set.
KERNEN: Okay. Where are we? I know that there's a lot of questions. We just mentioned China. Let's start with China. Where are we with China? Are there negotiations? Was there a phone call with President Xi and President Trump?
BESSENT: You know, you know, Joe, treasury secretary does a lot of things, running the White House switchboard isn't one of them. So, they, you know, all aspects of government are in contact with China. And in terms of trade negotiations, we'll see where this goes. But as I've repeatedly said that I believe that it's up to China to deescalate because they sell five times more to us than we sell to them. And so, these 125 percent, 145 percent tariffs are unsustainable.
KERNEN: The, we also hear about all the different countries that maybe ready to deal on some level, whether it's tariffs or currency or whatever. Do you have any idea how close we are? And who could be first? And is it possible, Scott, that there could be a template that could be, we wouldn't have to do each one individually, because it seems like it's very complex. And this would extend the process to months or even years to do 100 different countries. Is there any way to do something that looks almost standardized? And who would we do it with first?
BESSENT: Well, Joe, we do have a standardized template. We're not going to share it. But as I've said before, there are 15 to 18 important trading relationships. As you said earlier, we'll put China to the side. That's a more complex negotiation. And with the other 17, especially with the other Asian countries, we've had many countries come forward and present some very good proposals, and we're evaluating those. But I tell you, Joe, when I look at these proposals, and some of them, you know, are really, were willing to lower their tariffs, lower their non-tariff barriers. But I look at what they're proposing, and I just think, how did we get here? How did we get here?
KERNEN: Right.
BESSENT: And you know, I agree with. President Trump. I don't blame it on these countries. I blame it on the past administrations. And it's going to be a big victory when we, the, make progress in the getting these tariffs, non-tariff trade barriers, currency manipulation, state subsidies of labor and industry off.
KERNEN: Been quite a bit of consternation expressed about the U.S. brand and the U.S. using it, losing its preeminence as a place for capital allocation and investment. I want to bring up, I just happen to see it this morning. One of our frequent guests, Kyle Bass, points out. Okay, you're going to go somewhere else rather than the United States. “Europe is anti-growth, anti-capitalist, pro-tax, super regulatory, loose collection of broken economies.” And points out that the EURO STOXX 50 index has had a 1.86 percent annualized return for the past 20 years. The S&P 10 percent plus. Are you concerned that that this could snowball into a point where, where would they go? Where, if you don't go to Europe, where would you go? And where will Europe go? China? Is that what we're worried about?
BESSENT: Well, Joe, look, what this administration is committed to is keeping the U.S. the best place in the world for capital to arrive. And we are doing that. We're going to have tax certainty. We are going to not be taken advantage of in trade anymore and we are going to deregulate the largest, the deregulated, large economy in the world. If you look at the Draghi report, he says that Europe has basically tariffed themselves. I think it's 50 percent on goods, 100 percent on services. And we'll see if they can make any progress there. The other thing I would tell you is I imagine that the Europeans are now in a panic over the strength of the euro. And you're going to see the ECB start cutting rates to try to get the euro back down. Europeans don't want a strong euro. We have a strong dollar policy. We just saw this unfortunate incident where China, they claimed sovereignty over a Philippine island. They, are you going to send your capital to a country that behaves like this?
ANDREW ROSS SORKIN: Mr. Secretary, I have a question that relates back to China, but also back to a comment that you made last week that I think actually moved the market. So last Tuesday, you had a meeting with JP -- that JPMorgan hosted. This was this private investor summit. And your comments either leaked out or got out. And those comments, if you really look at the market, moved the market materially higher on the back of them, where you said, quote, “there will be a de-escalation in the very near future.” That was the quote. And so, my question to you is what confidence or assurance do you have, may, having made that statement when it now appears, maybe I'm misunderstanding it, that when you did meet with the Chinese last week during the IMF meeting, you did not talk about tariffs yourself and it sounds like you're not engaged or involved in these China tariff discussions yourself. Maybe the president is, I know he said that he is. But you said that you don't know about those conversations.
BESSENT: Well, Andrew, first of all, to clarify the meeting with JPMorgan, there was nothing that I said in that meeting, nothing that I had not already said in the mainstream media 72 hours before. So, I was surprised when the market rallied and if you were to look at what happened after the meeting, the, after I sat down for a press conference, markets sold off. So, if you bought during the meeting, you actually lost. To get to the meatier question, that it's a complicated relationship with China but it is my belief that which is unsustainable will not be sustained. And again, the Chinese business model is predicated on selling subsidized goods into the U.S. And it, it's just not a long-term business strategy for them. So, I am sure that they will come and want to de-escalate.
SORKIN: Right. But that's just, so we're 100 percent clear. And by the way, you may very well be right. I actually happen to agree with you on that front, but I'm agreeing with you in the context of just my presumption that that is correct, not because I've engaged in conversations with them directly. And it sounds like you haven't either. Just so, just so we're all on the same page.
BESSENT: Andrew, you know, just to feed the news cycle, I'm not going to talk about where we are or not. What we're going to do is create the best deal for the American people, and that is obviously not done on television.
BECKY QUICK: Mr. Secretary, last Friday, “Time Magazine” published an interview with President Trump where he said that he could see a year from now, 50 percent tariffs on goods coming from China. Is that a future you could envision?
BESSENT: I, again, Becky, we're going to have to see where the de-escalation takes us. You know, President Trump is leading for the important trading partners. President Trump is leading the negotiations. And we'll see what he decides on them.
SORKIN: Mr. Secretary, earlier this morning, Japan's economic minister said that there would be no change to our stance that we are demanding full removal of U.S. tariffs. Can you speak to where our conversations are with the Japanese? Because clearly, at least publicly, they seem to be pushing back.
BESSENT: Well, you know, again, Andrew, if they want to litigate the negotiations in the press, they have an election coming up, an upper house election coming up in July. So I can't imagine that they would say anything else. You know, I don't think they're going to come out and say, oh, whatever the U.S. wants. Sure. We'll do it. And, but I will tell you that the negotiations with our Asian trading partners are going very well. Vice President Vance was in India last week, talked about substantial progress. I have mentioned that the negotiations with the Republic of Korea have gone very well. And I think we've had some very substantial negotiations with our Japanese allies.
KERNEN: Secretary, China quietly says here, exempting certain goods from tariffs that they need, which shows their dependance on a lot of, or interdependence with the United States on many, many different things. Similarly, the Trump administration has announced quite a few exemptions on some of the reciprocal tariffs for things that we absolutely need here. Doesn't, isn't this sort of an opening for what negotiations would look like? And would you just take a complete decoupling with China off the table right now since we both, we know global trade has benefited the globe. We don't want zero global trade. But what doesn't this indicate what's at stake here?
BESSENT: Well, Joe, I think this makes my point that the Chinese, they are exempting all these goods tells me that they want a de-escalation. And what we haven't done is escalate by embargoing those goods or putting the, a trade ban on those goods, which we could if we needed to, to gain more leverage. We haven't done it. They've actually given us a list of what comes from the U.S. that is valuable to them. And, you know, I can tell you, I do have an escalation ladder in my back pocket, and we're very anxious not to have to use it.
QUICK: Mr. Secretary, Gary Cohn was on “Face the Nation” yesterday. And he said that he thinks we're weeks away from starting to see the effects of this actually show up, whether it be in prices, or I guess to some extent, you could suggest in shortages of certain items. Where do you think we stand just in terms of how long it will be before Americans really start to feel this?
BESSENT: You know, Becky, I can't tell you the, what various retailers have done in terms of stockpiling, in terms of substitution, in terms of elasticities. I didn't see Gary's interview.
SORKIN: Mr. Secretary, I have a separate question about Apple and maybe manufacturing in the U.S. and or manufacturing as it relates to this trade war potentially with China. You saw last week that there was a news story. Apple may be moving or may try to move all of its manufacturing of iPhones that are exported to the United States or imported into the United States, moving that manufacturing from China to India. And I'm curious what you think of that, that might be an improvement from having it manufactured in China, but it's also not manufacturing it here in the U.S.
BESSENT: Well, Andrew, I think maybe it speaks to China being an unreliable trade partner, and again, these aggressive actions against the Philippines. So, and as I mentioned, I would guess that India would be one of the first trade deals we would sign. So, watch this space.
KERNEN: Mr. Secretary, can we assume that, that regardless of what we hear or in in being reported and sourced or however it's going on, that there are discussions going on between the United States and China at all times? And probably at most different levels, both high and low. Should we ignore a lot of the noise and just assume that in earnest, both companies are, or both countries are trying to, as you say, de-escalate? Can we put that in the bank?
BESSENT: Well, Joe, these are the two largest economies in the world.
KERNEN: Yes.
BESSENT: So, there are a lot, there are a lot of touch points. As you know, last week was IMF-World Bank Week in D.C. I had my Chinese counterparts here, and we talked about what you talk about at IMF-World Bank meetings. We talked about financial stability. You looked ahead to trying to prevent financial crises. You talked about global financial regulation. So, there are lots of touch points all the time.
KERNEN: Okay. We'll leave it at that then and just assume that, that both sides have an interest, a mutual interest I think in, in getting to a better place. We appreciate your time as we always do. Mr. Secretary, thanks.
BESSENT: Good to see you.
KERNEN: Good to see you.
SORKIN: Thank you.
