The U.S. Treasury Secretary, Benson, said on Monday (July 21) that the next round of U.S.-China negotiations will take place soon, possibly involving issues related to China’s purchase of Russian and Iranian oil.
Benson made the above remarks during an interview with the financial news website CNBC.
Regarding the ongoing U.S.-China negotiations, Benson stated, “I think trade is in a good place, and now we can start discussing other things. Unfortunately, China is a significant buyer of sanctioned Iranian and Russian oil. Therefore, we may begin discussing this issue.”
According to Bloomberg, this indicates that the focus of the U.S.-China negotiations may shift from traditional trade issues to national security-related concerns.
Benson also mentioned that the U.S. may discuss with China the issue that everyone avoids mentioning, which is the need for China to make a “significant rebalancing.”
“They hold 30% of the global export manufacturing share, a number that cannot increase further and may even shrink,” the Treasury Secretary said. “We and other countries around the world see that we have erected tariff walls around China, but China has not reduced its manufacturing. Therefore, these goods are being shipped to Europe, Canada, Australia, and the global South, flooding these markets.”
The European Union has been concerned that after the U.S. increased tariffs on China, China might divert its originally low-cost exports to the U.S. to Europe. On April 8, the President of the European Commission, Ursula von der Leyen, discussed with Chinese Premier Li Keqiang the establishment of a mechanism to monitor potential trade shifts and ensure the appropriate handling of any developments.
President Trump warned on July 14 that if Russia and Ukraine fail to reach a ceasefire agreement within the next 50 days, the U.S. will impose a 100% second-tier tariff on countries purchasing Russian energy products. NATO Secretary-General, Mark Rutte, stated on July 15 that serious sanctions may be imposed on China, Brazil, and India if they continue to trade with Russia.
In a CNBC interview this week, Benson once again warned of the consequences of China purchasing Russian oil. He said, “Any country purchasing sanctioned Russian oil will face tariffs of up to 100%.”
“I urge our boastful European allies that if we implement these second-tier tariffs, please follow suit with us,” he added.
Since Russia’s invasion of Ukraine, Russia has faced significant restrictions in entering Western markets, relying heavily on income from exporting crude oil to China to sustain its expenditures. India is Russia’s second-largest oil customer. China is also Iran’s largest trading partner and biggest oil buyer.