U.S. Wants China To Cut Export Dependence In Next Round Of Trade Talks

China’s heavy dependence on exports will likely be a key focus in a new round of U.S.-China trade talks this coming week in Stockholm.

Treasury Secretary Scott Bessent said China’s share of global manufacturing exports—nearly 30%—“can’t get any bigger, and it should probably shrink.” I Photo: KEYSTONE/EDA/Martial Trezzini FDFA Federal Dep. of Foreign Affairs Flickr

However, a trade deal would not necessarily help Beijing rebalance its economy, Ken Moritsugu and Elaine Kurtenbach reported for the Associated Press (AP).

U.S. Treasury Secretary Scott Bessent has said he hopes the negotiations can address this issue, along with China’s purchases of oil from Russia and Iran, which undercut U.S. sanctions on those two countries.

Hopes rose for a breakthrough after President Donald Trump announced trade deals this week with Japan, Indonesia, and the Philippines.

The U.S. wants China to take two steps: first, reduce what both the U.S. and the European Union (EU) see as excess production capacity in many industries, including steel and electric vehicles; and second, boost domestic consumer spending so that China’s economy relies less on exports and more on internal demand.

“We could also discuss the elephant in the room, which is this great rebalancing that the Chinese need to do,” Bessent told CNBC. He said China’s share of global manufacturing exports—nearly 30%—“can’t get any bigger, and it should probably shrink.”

These issues are not new. China has been working to address them for years, more for domestic reasons than to reduce trade surpluses with the U.S. and other countries.

Bessent’s predecessor, Janet Yellen, also focused on industrial policy during a trip to China last year. She blamed government subsidies for flooding the global market with “artificially cheap Chinese products.”

The EU, whose top leaders met with Chinese counterparts in Beijing recently, has also cited subsidies to justify EU tariffs on Chinese-made electric vehicles.