US Treasury Secretary Scott Bessent said on Wednesday that China's export-led economic model is "unsustainable" and harmful to China and the entire world, amid escalating trade tensions between the world's two largest economies.
"It's an unsustainable model that harms not just China, but the entire world," Bessent said in a speech in Washington, referring to concerns about trade imbalances that US President Donald Trump says he seeks to address through the imposition of comprehensive tariffs.
However, Bessant emphasized that "America First does not mean America alone," asserting that the Trump administration's actions are not isolationist, but rather a call to "promote deeper cooperation and mutual respect among trading partners."
Bessent criticized what he described as "deliberate policy choices" made by some countries that have led to the decline of manufacturing in the United States, putting American security "at stake."
He continued, "The status quo of large and persistent trade imbalances is not sustainable," adding, "It is not sustainable for the United States, and ultimately, it will not be sustainable for other economies either."
His remarks came during a forum organized by the Institute of International Finance (IIF) on the sidelines of the IMF and World Bank Spring Meetings.
In the same context, the US Secretary of State said that both the IMF and the World Bank must be rehabilitated to be "fit for the purposes for which they were established," noting that the two institutions have deviated from their original mandates.
Bessent explained that "the IMF is not obligated to provide loans to countries that fail to implement reforms," adding, "Economic stability and growth should be the true measures of the fund's success, not the amount of money it provides."
As for the World Bank, he said that the institution "should no longer expect blank checks in exchange for propaganda campaigns based on rhetoric, accompanied by weak reform commitments."
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