Key facts
- U.S. Treasury Secretary Scott Bessent stated that recent yen movements are 'pretty well contained' and not disorderly.
- Bessent plans to urge G20 nations to review their trade agreements with China.
- He believes China's current export levels are unsustainable and that the nation needs to rebalance its economy towards domestic consumption.
- The U.S. Treasury Department is likely to unveil weekly new secondary sanctions aimed at increasing economic pressure on Iran.
- Bessent stated the next step may be cutting off an institution entirely from the dollar-based financial system.
U.S. Treasury Secretary Scott Bessent stated that recent movements in the Japanese yen are 'pretty well contained' and not disorderly, suggesting they do not warrant intervention. Bessent also indicated he would encourage G20 member countries to re-examine their terms of trade with China as part of efforts to shrink global imbalances and press Beijing to rebalance its economy away from exports towards more domestic consumption. He believes the current flood of exports from China is unsustainable, even though the U.S. direct trade position with China is 'rapidly improving.' Bessent noted that the world cannot sustain a China with a $1.2 trillion trade surplus, and that China is trying to export its way out of a weak economy. The U.S. has walled off its economy from many Chinese exports with high tariffs and outright bans on some products, leading China to divert exports elsewhere, especially to Europe and Latin America. Bessent said it will be up to other countries to give China an incentive to shift away from exports and strengthen its chronically weak domestic demand. He expressed confidence in Bank of Japan Governor Kazuo Ueda's ability to manage monetary policy and suggested the era of 'Abenomics' might be over. Bessent is scheduled to meet Ueda on the sidelines of the Group of 20 finance leaders' meeting. Separately, Bessent indicated that the U.S. Treasury Department is likely to unveil weekly new secondary sanctions aimed at increasing economic pressure on Iran, with an initial focus on banks. After imposing penalties on the United Arab Emirates branches of Egypt's Banque Misr on Friday over alleged financial links to Iran, Bessent said the next step may be cutting off an institution entirely from the dollar-based financial system.