Treasury Secretary Scott Bessent said Beijing has a choice to be a reliable partner with the rest of the world or not, reiterating that China needs to shift to a more consumption-oriented economy to help ease global imbalances.

"They want to be a reliable partner with the rest of the world, or they don't," Bessent said via video link to the American Swiss Foundation Leadership Summit in Zurich on Tuesday.

"They're in the middle of a big real estate — I'm not going to be fearmongering and say crisis — but a big real estate development and the way for them to stabilize their economy is not to export deflation and excess product to the rest of the world," he said. "The way to do that is through a level of fiscal stimulus and stop the overproduction, and get on a solid footing for the consumer economy." Bessent did not comment on a possible phone call between President Donald Trump and President Xi Jinping, which White House officials have said is being prepared.

The world's two largest economies have blamed each other for violating the terms of a deal they announced three weeks ago in Geneva that suspended retaliatory tariffs until mid-August to allow time for talks to get underway.

Read more: Swiss Watch Exports Surge in April Ahead of U.S. Tariff Threats

Trump "wants the U.S. to be more than just a manufacturing economy," Bessent said. The U.S. is seeking to remain a destination for foreign and domestic investment with tax cuts, trade rebalancing and deregulation, adding that precision manufacturing is one of the Trump administration's goals, he said.

Bessent also said he sees untapped potential for Switzerland and the U.S. to collaborate more on artificial intelligence and financial services. He said U.S. officials will continue to work with their Swiss counterparts to simplify global financial regulation, modernize capital requirements and continue to engage with each other on key macroeconomic issues.

July 9 extension

Switzerland is one of several countries trying to negotiate a bilateral trade deal with the U.S. to avoid Trump's retaliatory 10% tariff hike to the higher level set on April 2 — 31% in Switzerland's case — when a 90-day suspension ends on July 9.

Speaking earlier at the same forum, Switzerland's top trade official Helene Budliger said Switzerland had been assured by the U.S. that tariffs would remain at the current 10% level instead of rising to 31%, even if negotiations were extended beyond July 9.

Read more: U.S. Tariff Countdown Heats Up Race to Turn Talks Into Deal

Switzerland has been told "several times," by both Minister Bessent and U.S. Trade Representative Jamieson Greer, that the time would be extended, "as long as there is a perception that we are negotiating in a bona fide way — which is the only way Switzerland negotiates," she said in a conversation with Bloomberg TV's Annmarie Hordern.

Swiss President Karin Keller-Sutter has previously said it was "clear" the deadline would be pushed back as talks continue, but there has been no confirmation from the U.S. on this. The Swiss government last week signed a negotiating mandate outlining a compromise around tariff cuts for agricultural goods that the country does not produce significantly.

Budliger added that the two sides have started "quite detailed conversations about what a British-style deal between the U.S. and Switzerland might look like." There are "relatively concrete ideas" on the table, he said.

He also said that Switzerland suffers from a global steel glut along with the U.S. (alg)

Source: Bloomberg