U.S. Treasury Secretary Scott Besant has reassured markets by asserting that the United States will not default on its debt obligations, amidst rising concerns over the country's financial soundness. In an interview with CBS, Besant declared, "The United States will never default, and that will never happen," in response to mounting worries on Wall Street about the increasing federal debt fueled by President Donald Trump's tax cuts.
The statement comes as President Trump is poised to speak with Chinese President Xi Jinping regarding alleged violations of the U.S.-China trade agreement. This agreement, forged during high-level trade talks in Geneva, involved both nations agreeing to reduce tariffs and China lifting certain trade barriers. However, the U.S. claims China has not adhered to the terms, particularly regarding export restrictions on critical minerals.
Besant, leading U.S. trade negotiations, expressed confidence that upcoming discussions between Trump and Xi will resolve these issues. Meanwhile, Kevin Hassett, Chairman of the White House National Economic Council, highlighted alternative tariff measures available should legal challenges block current reciprocal tariffs.
Concerns about U.S. fiscal health have intensified following Moody's recent downgrade of the nation's credit rating, citing worsening deficits. JPMorgan Chase CEO Jamie Dimon has also warned of potential disruptions in the bond market due to excessive government spending and monetary easing.
Despite these challenges, Commerce Secretary Howard Lutnick has downplayed the likelihood of extending the reciprocal tariff suspension beyond its July expiration. He emphasized the critical role of U.S. consumers in the global market, particularly regarding Chinese goods, hinting at the broader economic implications of trade negotiations.
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