Bessent Says Debt Limit Measures Could Run Out in August
Treasury Secretary Scott Bessent told US lawmakers that his department's ability to use special accounting maneuvers to stay within the federal debt limit could be exhausted in August.
Bessent in a letter to House Speaker Mike Johnson said that 'after reviewing receipts from the recent April tax filing season, there is a reasonable probablity that the federal government's cash and extraordinary measures will be exhausted in August while Congress is scheduled to be in recess.'
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Politico
24 minutes ago
- Politico
Trump, Xi speak for first time since Inauguration Day
President Donald Trump said he spoke Thursday with China's leader, Xi Jinping, breaking the monthslong silence between the two leaders. In a post on Truth Social, Trump said that U.S. and Chinese leaders will meet again 'shortly.' U.S. representatives will include Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick and U.S. Trade Representative Jamieson Greer. The president described it as a 'very good phone call' and said that Xi invited him to visit China. This is the first call between the two world leaders since Trump's second term began. It comes at a key point for China-U.S. relations as the two countries try to deescalate a trade war Trump started this spring by levying 145 percent tariffs on China, which the Chinese retaliated against, halting trade between the two countries.
CNN
26 minutes ago
- CNN
Analysis: Trump is increasingly hostile to China. He's playing with fire
Despite widespread concerns that the trade war is dragging down America's economy, President Donald Trump has notched quite a few wins on his economic belt in recent weeks. Inflation keeps falling. Jobs remain plentiful. And there's growing evidence the economy could be booming this quarter. That's why Trump's increasingly hostile rhetoric about China over the past week was particularly concerning ahead of his call Thursday with Chinese leader Xi Jinping. Trump's economy is cookin' – for now. But the economic Jenga tower the Trump administration has constructed is precariously balanced on a host of economic caveats and unproven theories. Renewed trade tensions with the world's second-largest economy threatens to knock the tower to the ground. May 12 represented a major turning point for the global trade war. Delegates from China and the United States announced they would significantly roll back their historically high tariffs on one another. Markets were elated. Wall Street banks curtailed their recession forecasts. And moribund consumer confidence rebounded significantly. That's a significant change from April, when tensions ran so high that trade between the United States and China came to an effective halt. The 145% tariffs on most Chinese imported goods made the math impossible for American businesses to buy virtually anything from China, America's second-largest trading partner. No one wants to return to that. Treasury Secretary Scott Bessent, America's chief negotiator in the détente with China, said previous tariff levels were 'unsustainable.' That's why he said the countries put in place mechanisms to prevent a re-escalation. But Trump and his administration in recent weeks have grown increasingly hostile toward China, accusing the country of breaking the promises it made in mid-May. China has similarly said the United States has failed to live up to its obligations under the agreement. Trump and Xi held a long-awaited phone call Thursday, a person familiar with the matter said. The White House did not immediately confirm the call, which was also reported by Chinese state media. If the call fails to result in another de-escalation, tensions could boil over, and tariffs could rise again. So could recession forecasts. And the good vibes that have powered a rebound in sentiment and a massive market rally could disappear in a flash. Although virtually no economic reports are entirely good or bad, and with the obvious caveat that monthly economic data are inherently backward looking, US data have been surprisingly resilient lately. Annual consumer prices grew just 2.3% in April, according to the Consumer Price Index, and inflation that month fell to 2.1%, according to the separate Personal Consumption Expenditures price index. The PCE report is particularly noteworthy, because the Federal Reserve favors that report when it considers whether to change interest rates. Over time, the Fed targets 2% inflation, so America is, at long last, nearing that long-term target after a yearslong bout with historic price hikes. Trump, citing America's low inflation rate, has been bullying Federal Reserve Chair Jerome Powell to cut interest rates to boost the economy – even summoning Powell to the White House last week to give him a talking to. As Powell has noted, economic data is looking strong. Jobs data, although weakening, has steadied in recent months. The unemployment rate is hovering at just over 4%, and employers have added a solid number of jobs each month. The number of available jobs in America unexpectedly increased in April, a potential indicator that the labor market remains robust. And a positive effect of trade tensions could at least temporarily benefit America's economy. Gross domestic product, the broadest measure of the economy, shifted into reverse in the first quarter as businesses stockpiled goods in anticipation of tariffs. This quarter, imports from foreign countries – particularly China – have fallen dramatically. In April, the US trade deficit shrank by its steepest monthly pace on records, which go back to 1992. That should give America a big, albeit momentary, boost. The Atlanta Fed's GDPNow tool currently predicts the US economy will grow at an adjusted annualized rate of 4.6% this quarter, a huge number that would more than make up for the -0.2% rate in the first quarter. But Trump's ramping up of restrictions and public scrutiny of China risks putting sugar in the gas tank just as the engine started humming again. Trump on Wednesday said in a Truth Social post that Chinese leader Xi Jinping was 'extremely hard to make a deal with.' Trade talks have stalled, Bessent said, apparently frustrating Trump. Last week, Trump posted on social media that China 'TOTALLY VIOLATED ITS AGREEMENT WITH US.' Trump said that he made a 'fast deal' with China to 'save them from what I thought was going to be a very bad situation.' He added: 'So much for being Mr. NICE GUY!' The Trump administration had expected China to lift restrictions on rare earth materials that are critical components for a wide range of electronics, but China has so far refused, causing intense displeasure inside the Trump administration and prompting a recent series of measures to be imposed on the country three administration officials told CNN last week. For example, the White House warned US companies against using AI chips made by China's national tech champion Huawei. It stopped US companies from selling to China software that is used to design semiconductors. And the US State Department announced it would 'aggressively revoke visas' for some Chinese students in America. China, in turn, has accused the United States of 'provoking new economic and trade frictions.' 'The United States has been unilaterally provoking new economic and trade frictions, exacerbating the uncertainty and instability of bilateral economic and trade relations,' the Chinese Commerce Ministry said Sunday. Meanwhile, it's not like tariffs have completely evaporated. The United States maintains a 10% universal tariff on most goods coming into the country, and Trump just doubled tariffs on steel and aluminum this week. He has threatened higher tariffs on dozens of countries that are unable to reach trade deals with the administration over the course of the next month. And China and the United States, despite their de-escalation last month, maintain significant, double-digit tariffs on one another. Economists, Wall Street analysts, business leaders and consumers continue to sound the alarm bell about the trade war, worrying about a toxic combination of rising prices and slowing economic growth. Despite the recent spate of good economic news, some underlying data is raising concerns. A government report this week showed layoffs in April leapt higher by nearly 200,000 to 1.786 million, reversing a similarly sized drop seen in March. Initial unemployment claims rose to 247,000 last week, far more than estimated. And outplacement firm Challenger, Gray & Christmas reported Thursday that American employers announced 94,000 layoffs in May – down 12% from April but up 47% from last year. Layoff announcements have spiked 80% this year. Last week, a key economic report showed consumer spending rose just 0.2% in April, a weaker-than-anticipated reading and a significant retreat from March. And some consumer and business survey data remain incredibly weak. Consumer sentiment remained near historic lows reached in March despite recent trade deal announcements, according to the University of Michigan. And the Fed's beige book, a collection of business leaders' reactions to the economic environment, showed that companies across industries are remaining deeply uncertain about the economy – particularly because of the trade war. So good news could ultimately turn bad, even without escalating tensions with China. But a return to tit-for-tat tariffs and closed borders could make matters significantly worse.
Chicago Tribune
27 minutes ago
- Chicago Tribune
President Donald Trump speaks with Xi amid stalled talks between the US and China over tariffs
WASHINGTON — U.S. President Donald Trump and Chinese leader Xi Jinping spoke on Thursday at a time when stalled tariff negotiations between their two countries have roiled global trade. The conversation was confirmed by the Chinese foreign ministry, which said Trump initiated the call. The White House did not immediately comment. Trump had declared one day earlier that it was difficult to reach a deal with Xi. 'I like President XI of China, always have, and always will, but he is VERY TOUGH, AND EXTREMELY HARD TO MAKE A DEAL WITH!!!' Trump posted Wednesday on his social media site. Trade negotiations between the United States and China stalled shortly after a May 12 agreement between the two countries to reduce their tariff rates while talks played out. Behind the gridlock has been the continued competition for an economic edge. The U.S. accuses China of not exporting critical minerals, and the Chinese government objects to America restricting its sale of advanced chips and its access to student visas for college and graduate students. Trump has lowered his 145% tariffs on Chinese goods to 30% for 90 days to allow for talks. China also reduced its taxes on U.S. goods from 125% to 10%. The back and forth has caused sharp swings in global markets and threatens to hamper trade between the two countries. Treasury Secretary Scott Bessent had suggested that only a conversation between Trump and Xi could resolve these differences so that talks could restart in earnest. The underlying tension between the two countries may still persist, though. Even if negotiations resume, Trump wants to lessen America's reliance on Chinese factories and reindustrialize the U.S., whereas China wants the ability to continue its push into technologies such as electric vehicles and artificial intelligence that could be crucial to securing its economic future. The United States ran a trade imbalance of $295 billion with China in 2024, according to the Census Bureau. While the Chinese government's focus on manufacturing has turned it into a major economic and geopolitical power, China has been muddling through a slowing economy after a real estate crisis and coronavirus pandemic lockdowns weakened consumer spending. Trump and Xi had last spoken in January, three days before Inauguration Day. The pair discussed trade then, as well as Trump's demands that China do more to prevent the synthetic opioid fentanyl from entering the United States. Trump had long expressed optimism about the prospects for a major deal, before his post suggesting Xi was making that difficult. Last week, Trump went further, posting, 'The bad news is that China, perhaps not surprisingly to some, HAS TOTALLY VIOLATED ITS AGREEMENT WITH US,' Trump posted. 'So much for being Mr. NICE GUY!'
