U.S. Treasury Secretary Scott Bessent urged Group of 20 member countries to rethink the terms of their trade with China. With low-priced Chinese manufactured exports stemming from overcapacity weighing on the manufacturing base and trade balances of major economies, the remarks are read as an attempt by the Donald Trump administration to widen pressure on Beijing from a bilateral U.S.-China standoff into multilateral coordination. Bessent also signaled additional sanctions on financial institutions doing business with Iran, indicating Washington is prepared to escalate its strategy of isolating the Iranian economy.
Bessent laid out the position in an interview with Reuters on the 30th, a day before the G20 finance ministers' meeting, saying the flood of Chinese exports is not sustainable. The world cannot absorb a China running a $1.2 trillion trade surplus, he said, adding that the Chinese economy is quite fragile and that Beijing is trying to export its way out of the problem. China needs to rebalance its economic structure, he said.
China has drawn criticism for pushing excess production overseas without resolving the weak domestic demand that deepened after the collapse of its property-driven economy. Bessent's point is that Beijing must change a structure in which it offsets slowing growth by expanding exports rather than by building up domestic demand and consumption. It is now time for the rest of the world to rethink its terms of trade with China, he said.
The remarks are seen as a step toward broadening the trade fight with China from a head-to-head U.S.-China contest into joint pressure on Beijing. With steep U.S. tariffs and import bans on some Chinese goods pushing those exports toward Europe and Latin America, Washington aims to encourage G20 countries to raise trade barriers against China together and reshape the trading environment.
Bessent also said he would tighten financial sanctions on Iran. In an interview with the Associated Press the same day, he said the United States plans to impose additional sanctions this week on one bank that does business with Iran, warning that Washington would resort to "financial violence" if necessary.
The Treasury Department earlier proposed a rule that would cut off five branches of Egypt's state-owned Banque Misr in Abu Dhabi and Dubai in the United Arab Emirates from the U.S. financial system. The department concluded that those branches handled about $1.8 billion in illicit funds for front companies linked to Iran's defense ministry and the Islamic Revolutionary Guard Corps (IRGC) from 2024 until recently. The move signaled that the United States could impose further sanctions on institutions dealing with Iran.
Bessent to Meet BOJ Governor at G20 Meeting
On the recent weakness in the yen, Bessent said the currency was "quite well controlled." The assessment means that while the yen has again approached the 160-per-dollar level, he does not see the kind of disorderly moves that triggered joint U.S.-Japan market intervention last month.
On whether the Bank of Japan will raise interest rates further, he said he expects BOJ Governor Kazuo Ueda to make appropriate monetary policy decisions. He added that he would not dictate policy to Japan, but said it should be seriously considered that Abenomics, a monetary reflation program, has reached its final stage. Bessent plans to hold a separate meeting with Ueda on the sidelines of the G20 gathering.
With the G20 finance ministers' meeting running through the 1st of next month, Bessent is seen as facing a test of economic diplomacy in which he must address not only narrowing the trade imbalance with China, cutting off Iran's financial access and spurring global growth, but also easing concerns over the surge in U.S. debt and rising Treasury yields.
On that point, Bessent told the Associated Press that he would make restoring the global economy's growth momentum the top priority at the meeting. With the world burdened by enormous debt, many countries are running large fiscal deficits while growth rates remain near zero, he said, adding that the debt problem can ultimately be overcome only through economic growth.
