Economist Peter Schiff pushed back against Treasury Secretary Scott Bessent’s comments on U.S.-China trade, saying that Beijing's decision to reduce its reliance on American markets will strengthen, not weaken, its economy.
Bessent ‘Has It Backwards’
On Wednesday, in a post on X, Schiff said, “Scott Bessent has it backwards,” adding that China’s decision to “trade less with the U.S. and more with the rest of the world,” will lead to a “boom” in its economy.
“Selling to customers who can actually afford to pay is better business than selling to customers who can’t,” he said, which refers to the growing U.S. federal debt, interest payments to service this debt, alongside the weakening Dollar, all of which Schiff has highlighted several times in the past.
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In a subsequent post, Schiff said, “The way you actually pay for imports is exports. We don’t make enough stuff [that] the Chinese need. Other countries do.”
Schiff is responding to Bessent’s comments on the trade negotiations between the U.S. and China during CNBC’s “Invest In America” forum on Wednesday. Bessent said, “The Chinese are trying to backfill the narrative, you know, saying, well, the U.S. did A, B and C, therefore we had to do D. And that's not true.”
He added that “This is China versus the world. It's not a U.S.-China problem,” while terming the country’s latest decision to impose export controls on its rare earths as a “sign of decoupling” with the United States.
China’s Exports Surge Despite US Shortfall
On Monday, Jim Cramer, the host of CNBC’s Mad Money, expressed concerns that President Donald Trump’s tariffs were backfiring, as the Chinese were “learning to live without us” on his show.
Cramer also highlighted recent trade statistics, noting that “China’s total exports to destinations other than the United States grew nearly 15%, while their exports to the U.S. plunged 27%.” Despite the shortfall in the U.S. market, “total exports in September rose 8%.”
Economist Paul Krugman echoed similar concerns early this week, saying that “America is more vulnerable to a rupture than China is,” since “the U.S. economy is dependent on China for critical inputs, above all those rare earths.” China, on the other hand, can “stimulate domestic demand” to blunt the impact of lost exports, he said.
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Photo Courtesy: Maxim Elramsisy On Shutterstock.com
