The United States is seeking a fair and enduring competition with China, along with strengthening its economic and political relationships with Latin America, US Treasury Secretary Scott Bessent said on Tuesday. He termed this the strategy of reducing vulnerabilities without cutting ties with Beijing.
Speaking at an investor conference in Sao Paulo, hosted by the Brazilian bank BTG Pactual, Bessent said that Washington did not want to sever economic ties with China. Still, it was trying to reduce exposure in areas relevant to national security.
“We will be competitors, but we want that competition to be fair,” Bessent told the audience. “We do not want to decouple from China, but we need to reduce risks.”
He cited critical minerals, semiconductors and pharmaceuticals as examples of strategic areas in which the US wants greater domestic capability and supply chain diversification, noting that the global economy “cannot support a situation where China has a recurring trade surplus of about $1 trillion”, signalling that Beijing needs to change its growth model.
Bessent’s comments come before expected talks with Chinese Vice-Premier He Lifeng in the coming weeks and a planned visit by US President Donald Trump to China in April. This trip is part of efforts by both countries to stabilise commercial relations amid ongoing strategic competition.
Much of the secretary’s speech focused on Latin America, which he called central to US economic and geopolitical strategy.
Bessent said there is a “generational opportunity to strengthen ties with governments that support market-oriented reforms” and closer integration with Washington.
He used Argentina as an example of recent engagement, noting that the Trump administration provided economic support during President Javier Milei’s election campaign, a step to “maintain market confidence” in Buenos Aires during a volatile period.
The Treasury secretary’s participation in the event was attributed by the local press to his close relationship with the owner of BTG Pactual, banker André Esteves.
One of Brazil’s most prominent businessmen, Esteves is said to maintain a good relationship with White House officials and even met with Bessent in Washington to request an end to the tariffs imposed by Trump against Brasília due to alleged judicial persecution of former President Jair Bolsonaro, convicted of an attempted coup d’état in 2023.
On Tuesday’s event, the secretary recognised that relations between Trump and President Luiz Inacio Lula da Silva began on shaky ground but have since improved.
He confirmed that a Brazilian delegation is expected in Washington in early March to address unresolved trade issues and broader economic cooperation.
Despite diplomatic controversies caused by Trump’s economic agenda in Brazil, Bessent supported the use of tariffs as part of a broader effort to reindustrialise. He noted that while tariffs generate short-term revenue, the long-term goal is to encourage companies to move production to the United States, shifting government revenue towards domestic economic activity.
The Treasury chief also stated that neither he nor the president had directed the Federal Reserve to target a specific interest rate, noting that the administration wants a central bank leader who will be “open to assessing how technological changes, especially in artificial intelligence, could impact productivity and inflation”.
Kevin Warsh, nominated last month to replace Jerome Powell as the next Chair of the Fed, was selected with this in mind, Bessent added. -- SOUTH CHINA MORNING POST
