US Treasury Secretary Scott Bessent urges G20 to address China’s $1.2 trillion trade surplus

Scott Bessent has a message for the world’s largest economies: stop absorbing China’s export machine. The US Treasury Secretary is pushing G20 members to collectively re-evaluate their trade relationships with Beijing, framing China’s $1.2 trillion global trade surplus as a problem too big for any single country to solve alone.

The diplomatic offensive comes just ahead of the G20 finance leaders meeting in Asheville, North Carolina, scheduled for August 31 to September 1. Bessent’s argument boils down to a simple premise: the global economy cannot sustain the current imbalance, especially when China’s own domestic economy is showing signs of weakness.

The numbers behind the pressure campaign

Bessent’s case rests on some striking data points. China’s total exports surged 23.9% year-on-year in July 2026, a pace that contributed to a record global surplus of $1.189 trillion in 2025. That kind of export growth, happening while domestic consumption in China remains sluggish, essentially means Beijing is exporting its way out of economic trouble while other countries absorb the consequences.

The US has already been trying to address this on its own through tariffs. According to US Census Bureau data, those measures have cut the bilateral trade deficit with China by roughly one-third, bringing it down to $73.9 billion in the first half of 2026.

The problem with unilateral tariffs is that they tend to redirect trade rather than reduce it. Chinese goods that used to flow directly into the US are increasingly finding their way to other markets, sometimes through intermediary countries. That’s precisely why Bessent is making this a multilateral conversation. If only the US raises barriers while everyone else keeps their doors open, the global surplus barely budges.

The yuan question

Adding another layer of complexity is the value of China’s currency. The IMF estimates that the Chinese yuan is undervalued by approximately 21%. In practical terms, that means Chinese exports get an artificial price advantage on the global market, making them cheaper than they would be if the currency reflected economic fundamentals.

What Bessent actually wants

The Treasury Secretary’s pitch to G20 partners has two prongs. First, he wants other nations to adopt their own measures to address trade imbalances with China, creating a coordinated front rather than leaving the US to act alone. Second, and arguably more ambitious, he wants to push Beijing toward a fundamental restructuring of its economic model: less reliance on exports, more emphasis on domestic consumption.

The G20 gathering is also expected to serve as a venue for the US to push allies on sanctions enforcement against Iran and to discuss strategies for building more resilient supply chains.

Market implications worth watching

If the G20 actually coalesces around a tougher stance on Chinese trade practices, the ripple effects could be significant. Sectors with deep exposure to Chinese exports, particularly technology and manufacturing, would face the most immediate uncertainty.

The currency dimension adds another variable. Any coordinated pressure on the yuan’s valuation could shift the competitive landscape for exporters worldwide. A stronger yuan would make Chinese goods more expensive abroad while making imports into China cheaper, a dynamic that would benefit exporters in other countries but squeeze Chinese manufacturers.