Treasury Secretary Scott Bessent said on the 5th that major progress is expected in US-China trade negotiations in the coming weeks. (Reuters)

Treasury Secretary Scott Bessent said on the 5th that the US is very close to reaching some trade agreements, and that "major progress" may be made in negotiations with China in the coming weeks. He said that 17 trading partners have already proposed very good trade proposals, but not including China, which is also the largest piece of the puzzle for President Trump's trade challenges.

In an interview broadcast on NBC on April 4th, which was recorded on February 2nd, Trump expressed optimism about the prospect of reaching an agreement with China. He admitted that he has been "very tough" on China, implying that he would not cancel tariffs just to bring China back to the negotiating table.

Bessent also said that Trump's tariffs, tax cuts, and deregulation agenda will jointly drive long-term investment in the US economy, returning economic growth to 3% by this time next year. "We believe that by making deregulation and tax reform permanent, we can keep growth close to similar levels of 3%," he said.

Bessent earlier said at the prestigious Milken conference that the main components of Trump's economic agenda - trade, tax cuts, and deregulation - are not mutually beneficial policies, but interconnected components within an engine designed to drive long-term investment in the US economy. He emphasized that the US is the "preferred destination" for world capital.

He said that since Trump returned to the White House on January 20th, a series of tariff measures have been introduced to encourage companies like those present to invest, build factories, and produce in the US. This move will be rewarded through tax incentives and deregulation measures. Trump's tax bill will provide tax credits and reductions for high-tech business research and innovation, allowing 100% tax deductions for equipment investments in the same year, and extending to new factory construction to accelerate investment steps.

He also reassured investors, saying that although the current negotiation period between the US and its trading partners may not always be a pleasant process, it will ultimately strengthen relations.

He said that US financial markets have "anti-fragility," meaning they can withstand any short-term volatility. He said that US financial markets have the ability to weather any short-term turbulence, citing how the US market has rebounded from many challenges over the past century, including the Great Depression, two World Wars, the 9/11 attacks, the financial crisis, and the pandemic. "Our entire economic history can be summed up in a few words: continuous growth."

Bessent reiterated his focus on the 10-year US Treasury yield rather than the Federal Reserve's overnight benchmark interest rate. He said that a "smart" way to reduce deficits is to reduce them by about $300 billion annually, equivalent to 1% of the nearly $30 trillion US economy. "We want to reduce the deficit by approximately 1 percentage point each year over the next four years, bringing our deficit ratio back to the long-term average of around 3.5%," he said. If reducing deficits can mitigate credit risks in US Treasury bonds, interest rates "will naturally decline."

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