US Treasury Secretary Bessent is testifying in the House of Representatives! He spoke about the US-China Customs Tariff Agreement!

U.S. Treasury Secretary Scott Bessent testified today before the House Ways and Means Committee following the broad tariffs imposed by President Trump.

Bessent had returned to Washington in the early hours after leaving London late from trade talks with China.

Speaking to the press before leaving the historic Lancaster House near Buckingham Palace, where the talks are being held, Bessent said of the China talks, "We had productive talks for two days and the process is still ongoing."

Although the main agenda of today's session is the priorities of the Ministry of Treasury, the information that Bessent will provide about the trade talks with China has generated great interest among the committee members.

The main agenda of the talks is in exchange for China increasing its exports of rare earth elements to the USA; The U.S. lifted export restrictions on chip design software, jet engine parts, chemicals, and nuclear materials.

Some highlights from the speech prepared by Bessent were as follows:

• "If China adheres to the agreement, rebalancing is possible."
• "A significant improvement in inflation has been observed thanks to Trump."
• "Trump's policies have been effective in slowing down price increases."

In his opening speech, Bessent stated that federal tax revenues increased by 9.5% in April compared to the previous year and by 14.7% in May, arguing that this data refutes criticisms that the Trump administration's tax cuts would reduce revenues.

"The Treasury has completed its most successful tax return season in years; we have both increased efficiency and reduced costs at the IRS," he said.

Bessent also drew attention to the regulations included in the new tax law that promote production in the U.S. "We provide 100% depreciation for new and expanded factories. This law will initiate a new era of manufacturing in America," he stated.

"This law will provide predictability for individuals and businesses, and will increase economic momentum. It aims to empower workers and the middle class and to revitalize American manufacturing," he said.

Commenting on the talks in London, Bessent said: "I came back in the middle of the night, but these talks will not only stabilize the economic relationship, but also make it more balanced." Stating that China should move from overproduction to a consumption-oriented model, Bessent said, "If China sticks to the principles of the agreement we set in Geneva last month, a big, beautiful rebalancing between the world's two largest economies can take place."

Bessent also stated that inflation has been brought under control and that growth has occurred "without inflation." He expressed, "We will achieve this success again."

Bessent stated that China has the "most unstable economy in history" and that there has been a serious contraction in the real estate sector. He mentioned that the U.S. has received "unimaginably good" offers from other trading partners, which include a reduction in non-tariff barriers.

After California representative Linda Sanchez requested details about the agreement with China, Bessent stated that he returned at 4 a.m. and that the agreement is still in the "development stage." He also reported that the Chinese delegation questioned the validity of the first agreement during the Biden administration.

Bessent also warned that a "financial crisis unprecedented since 2008" could occur if the tax law does not pass.

*This is not investment advice.

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