Scott Bessent emphasizes need to derisk US-China trade relations

US Treasury Secretary Scott Bessent wants to make one thing clear: the United States isn’t trying to break up with China. It just wants to restructure the relationship so that both sides feel a little less exposed.

Speaking at the BTG Pactual CEO Conference in Sao Paolo, Bessent laid out what amounts to a recalibrated trade philosophy for the second Trump administration. The core message: de-risk, not decouple.

The specifics behind the slogan

Bessent proposed the creation of two new bilateral institutions: a “Board of Trade” and a “Board of Investment.” Their job would be to identify non-strategic goods that could qualify for tariff reductions, potentially covering around $30 billion worth of tariffs on each side.

That number sounds significant until you zoom out. China’s global trade surplus sits at an estimated $1.2 trillion. A $30 billion tariff rollback is roughly 2.5% of the surplus figure the US keeps pointing to as evidence that something is structurally off.

Bessent described the current state of US-China relations as being in “a very comfortable place.” His ongoing dialogue with Chinese Vice Premier He Lifeng appears to be producing at least the appearance of mutual willingness to negotiate.

What the numbers actually show

In the first half of 2026, US tariffs managed to reduce the bilateral goods trade deficit with China by approximately one-third, bringing it down to $73.9 billion for the period.

Bessent has urged G20 partners to revisit their own trade terms with China, framing the $1.2 trillion surplus as a global problem rather than a purely American grievance.

Earlier framework deals from 2025 included some notable concessions on both sides, including delayed rare-earth export controls from China and the US stepping back from a threatened 100% tariff on Chinese imports. Those agreements set the stage for the more structured negotiating framework Bessent is now proposing.

The bigger strategic picture

The “de-risk, not decouple” language has been a fixture of Bessent’s public remarks since at least February 2026.

The administration’s approach targets specific vulnerabilities. Rare earths remain a sensitive sector where the US is actively trying to reduce dependency. Technology transfers and semiconductor supply chains continue to face scrutiny. But everyday consumer goods and non-sensitive industrial inputs could see reduced barriers if the proposed trade boards gain traction.

The US is also nudging China toward a structural economic shift, encouraging a pivot from export-led growth toward domestic consumption. Whether Beijing has any incentive to comply when its export machine is generating a $1.2 trillion surplus is another question entirely.

The risk, of course, is that “de-risk” becomes a euphemism for very little substantive change. A $30 billion tariff adjustment on each side doesn’t fundamentally alter a trade relationship that moves hundreds of billions in goods annually. Whether these proposals gain real momentum will depend on what happens in the next round of negotiations with He Lifeng, and on whether domestic political pressures in both countries allow their trade officials enough room to actually make deals.