Optimism on US-China Trade Tensions Sparks Wall Street Rally

U.S. Treasury Secretary Scott Bessent expressed optimism about de-escalating U.S.-China trade tensions, despite no current negotiations. He emphasized the need for economic rebalancing between the two nations. Additionally, Bessent showed support for Argentina's economic reforms, contingent on the continued progress of Javier Milei's administration.

U.S. Treasury Secretary Scott Bessent is optimistic about a potential de-escalation in U.S.-China trade tensions, although negotiations have yet to commence. Investors at a JP Morgan conference were informed by a source privy to his closed-door presentation. The current bilateral trade situation was likened to a two-way embargo.

Bessent conveyed hopes for a significant economic rebalancing, envisioning China's pivot towards consumption and the U.S. focus on manufacturing. Despite his aspirations, Bessent was uncertain if Beijing was prepared for such a shift. His remarks were shared during a private Washington conference, coinciding with the IMF and World Bank Spring Meetings.

He highlighted the unsustainability of high tariffs, predicting near-future de-escalation as a relief for markets, boosting Wall Street after a prior sell-off. Bessent also indicated potential financial support for Argentina, conditional on its adherence to reforms and lack of external shocks. Bessent's recent visit to Buenos Aires aimed to underscore U.S. backing for their economic policies.

(With inputs from agencies.)