Bessent says Fed rate cuts needed, China making good on soybean purchases

NEW YORK: U.S. Treasury Secretary Scott Bessent on Wednesday expressed optimism about the economic outlook next year, but said interest rate cuts were still needed given a weakening in sectors including housing.

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Bessent also told the New York Times DealBook summit that President Donald Trump has "normalized" the idea of a global U.S. import tariff of 15% to 20%, and China was poised to complete its commitments under a U.S.-China trade agreement, including the purchase of 12 million metric tons of soybeans, which the Treasury chief said would be finished by the end of February 2026.

"I will say that China is on track to keep every part of the deal, every part of the deal," he said.

Bessent said on Wednesday he was optimistic the U.S. Supreme Court would uphold the legality of Trump's broad tariffs on goods from nearly every country imposed under the International Emergency Economic Powers Act. The Treasury chief said he interpreted Justice Amy Coney Barrett's comments during oral arguments that undoing the tariffs would be "a mess" as an indication the court will be "very prudent" in its decision.

But Bessent repeated that if the court rules against the IEEPA tariffs, the Trump administration "can recreate the exact tariff structure" with other legal authorities including Section 232 of the Trade Expansion Act of 1962, or Section 122 of the Trade Act of 1974.

Bessent said the tariffs have given the Trump administration negotiating room to bring down tariffs across a wide range of major trading partners, including China, Japan and the European Union.

He also denied that the tariffs were a tax or were stoking inflation, noting that China has lowered the prices of some exports to compensate for the tariffs.

Tariffs may cause a "one-time price adjustment," he said.

Bessent said there has been a 15% growth in capital expenditures, which will fuel employment growth going forward.