CNBC Exclusive: Transcript: U.S. Treasury Secretary Scott Bessent Speaks with CNBC's Eamon Javers on 'Power Lunch' Today

CNBC

29-07-2025

WHEN: Today, Tuesday, July 29, 2025
WHERE: CNBC's "Power Lunch"
Following is the unofficial transcript of a CNBC exclusive interview with U.S. Treasury Secretary Scott Bessent on CNBC's "Power Lunch" (M-F, 2PM-3PM ET) today, Tuesday, July 29. Following are links to video on CNBC.com: https://www.cnbc.com/video/2025/07/29/watch-cnbcs-full-interview-with-treasury-secretary-scott-bessent.html, https://www.cnbc.com/video/2025/07/29/treasury-sec-scott-bessent-not-end-of-the-world-if-snapback-tariffs-are-on-for-days-or-weeks.html and https://www.cnbc.com/video/2025/07/29/treasury-sec-scott-bessent-wouldnt-be-surprised-if-eu-put-on-some-tariffs-against-china.html.
All references must be sourced to CNBC.
EAMON JAVERS: Brian, thank you very much. And, yes, we are here with Scott Bessent. Mr. Treasury Secretary, thank you so much for doing this and being live on CNBC. Really appreciate your time today.
U.S. TREASURY SECRETARY SCOTT BESSENT: Good to see you. Good to be here in Stockholm.
JAVERS: Take us behind the scenes, if you could. Covering these things, as we reporters travel around the world following you guys, it's sort of a black box. We don't know what happens inside that room. We occasionally get the handout picture. How are these talks actually structured? What happens inside the room? Do you have sort of bullet points from both sides that each side agrees to bring up in advance? Does each side make a speech to each other? Bring us in the room.
BESSENT: Well, there's a lot of pregame, so a lot of preparation on both sides in terms of, what do we want to talk about? What would we like to accomplish? With the Chinese, there were 75 of them in their delegation, 15 of us.
JAVERS: Wow.
BESSENT: We start out in a very large room, probably 12 or 15 on each side of the table. As you said, there tends to be a bit of speech-reading. There's a little back-and-forth on that. Then there's a discussion. We have various topics. But the real work gets done. We break down into smaller groups of two on two, so Ambassador Jamieson, myself. It was with Vice Premier He Lifeng. And then they actually had two, a deputy trade minister and a deputy finance minister, and then the translators. And then Vice Premier Lifeng and I spent some time alone with the translators.
JAVERS: And do you go into breakout rooms to discuss among just the American side what the Chinese have proposed and then come back, or is it all done in the same room together?
BESSENT: Well, Ambassador Greer and I have been doing a lot of trade deals. And we have done a lot of prep in advance. This was our third meeting with this Chinese team. So we built up some level of personal rapport. We also -- I can tell you that London built on Geneva. Stockholm built on London and Geneva. So we have an arc that is getting better. We have been able to -- this meeting, we were able to discuss more of the big economic frameworks, whereas Geneva and London were much more specific meetings.
JAVERS: I think the market really expected that what we would see here is an extension of that August 12 deadline. That was sort of a low bar for these talks. People thought, if they can kick the can another 90 days and keep the truce in place that happened back in London, that's basically a win for Stockholm. Did you agree to kick that can down the road, or is that pending President Trump's approval?
BESSENT: Well, it's pending President Trump's approval. He has final say on all the trade deals. I spoke to him right before I came in with you. I'm going to see him with Ambassador Greer tomorrow. And he will have the final decision. I think our Chinese counterparts have jumped the gun a little and said that we do have an extension. I can say that the meetings were very far-reaching, far-reaching, robust and highly satisfactory.
JAVERS: And what will you recommend to President Trump, if you can share it with us? Will you recommend that he extend that pause?
BESSENT: Well, we're just going to give him the facts, and then he will decide.
JAVERS: What can you tell us what was agreed to in the room, if anything? Any specific agreements on any of those agenda items that you set up in the pregame, as you call it?
BESSENT: Well, we continually are perfecting their rare earth control system. It was a new system that was put in globally on April 4. And it's been a bit clunky. So, we keep pushing them to work on that. And it's the entire global supply chain, because the restrictions or the controls aren't just on the U.S. It's on every country. So we discussed that. We made some very good progress on that. We had very long discussions, in-depth discussions and reports on each other's economies. You know, we pushed them. They have what they call the five-year plan coming up. I believe the meeting is in September, October. It'll be discussed in February. And we discussed -- or Ambassador Jamieson and I encouraged them to work on rebalancing the economy towards more of a consumer economy, away from a manufacturing economy, and, if they have decided that that is in their five-year plan, to make that public.
JAVERS: The other big piece of speculation going into this was, would this tee up a Xi Jinping-Donald Trump meeting sometime in the fall, maybe October? You have said now that there was no discussion of that in these talks. So where do we stand on the idea of a possible world leaders meeting?
BESSENT: It was June 5, June 4 -- June 5, the president did a call with Party Chair Xi. Party Chair Xi invited him to come to Beijing. So that will be something between the White House and Xi's staff.
JAVERS: What else was discussed in the room? One of the items was Chinese purchases of Iranian oil. What did they say to your request to stop making those purchases?
BESSENT: They said they're a sovereign nation and that they have security needs, energy needs, and that it would be based on their internal policies.
JAVERS: And so you don't have any leverage at this point to push them on that? Or do you?
BESSENT: Well, not at this point. We have -- at Treasury, we have sanctioned what are called teapot refineries. They are private refineries, not state-owned. And so we have sanctioned those refineries. The owners and -- some of those owners may have assets in the U.S.
JAVERS: The other big question coming into this was, how much would the E.U. deal having been signed on Sunday influence what happened in the room in Stockholm this week? Did you get a sense whether that made any difference in terms of the trajectory of the talks here?
BESSENT: I think that everyone can see the arc of where these trade deals are going. I won't say that the Chinese were on their heels, because they're very composed. Vice Premier He Lifeng is a seasoned politician. But it's clear that the momentum was with us, that, when you get the E.U., the world's largest trading bloc, when you get that deal inked, we had Japan, we had Indonesia, we had Vietnam. So, not only did we have the E.U., who has a very large trading relationship with China. We also had three of their neighbors.
JAVERS: You said something interesting with a small group of reporters earlier today, which was that the Chinese goods -- if the U.S. is going to tariff Chinese goods, those goods have to go somewhere. And you think they're flowing to Europe, Canada and Australia. Do you think Europe needs to put up a tariff wall of its own? Do you think they need to be tariffing Chinese goods?
BESSENT: I wouldn't be surprised if they don't put on some kind of tariffs at a point. But this is where the opportunity is for the Chinese to be proactive and create a bigger consumer economy and sell more of those goods at home, because those goods can't just flow to the Global South.
JAVERS: You have said that's your goal for the Chinese economy. It's not entirely clear that that's the Chinese government's goal for the Chinese economy. To what degree do you get the sense that they embrace that argument at all?
BESSENT: Again, we will see. It may take some external forces. I remember -- I think I went to Japan first time in 1990. Maybe the bubble burst in 1991. They didn't fix the banking problem until 2004. Then Abenomics wasn't until 2012. And that was really an external stimulus. A lot of that was from the China threat. So it may take some external stimulus or an external -- the catalyst to get the Chinese to change. It may be more tariffs.
JAVERS: One of the big questions about that E.U. deal from the weekend is this $600 billion piece for additional purchases from the United States. But E.U. officials have come out since the deal was agreed to and said, well, that's coming from private sector companies. We don't really have any control over that, so we can't enforce it on our end. Does the U.S. have any guarantee that that $600 billion is real and is actually going to happen?
BESSENT: Well, I think that's going to be closely monitored. I think President Trump believes that this is a good deal. I mean, on paper, this is the deal of the century. And I would be surprised over time if the E.U. doesn't hold up their end of the bargain, or the 15 percent tariff rate could change.
JAVERS: What do you think those purchases will be? I mean, that could impact hugely some American companies.
BESSENT: Well, it could be purchases. Problem now is, Europe is rearming. NATO is finally upping its defense spending. We have a very large backlog with our defense companies. So I would imagine a big, big portion of that could be for defense. There are going to be some ag purchases. And then they will also be building, you know, increased investment in European companies putting plants in the U.S.
JAVERS: These deals have been coming pretty fast and furious. At times, it gets hard to track the details of them. The Vietnam deal that the president announced earlier in July, I don't think we have seen confirmation, or at least I haven't as I sit here now, from the Vietnamese government of that deal. Did we get confirmation from the Vietnamese government? Do we have an agreement with them on paper?
BESSENT: I didn't work on that deal, but I assume that we do, because we have also done Indonesia and Philippines, so I would imagine that—
JAVERS: But you haven't seen that paperwork?
BESSENT: But I don't -- that's -- Ambassador Greer, who is a seasoned veteran, with an encyclopedic memory and knowledge of all this, keeps all that.
JAVERS: How do you divide it in the room between yourself and Ambassador Greer as you are negotiating with the Chinese? Do you have a lane? Does he have a lane?
BESSENT: I think I try to keep things moving along in a big picture way and think about, what are our goals? Ambassador Greer, again, like I said, he not only has an encyclopedic knowledge. He has dealt with the Chinese in President Trump's first term. He knows all the particulars on tariffs, on trade, on -- he walks around. It's a great prop. It's probably two times, three times bigger than the old New York City phone book, but it's the non-tariff trade barriers of all the countries. So you kind of put that down on the table and say, OK, let's go through them.
JAVERS: Right. Friday, we have got another big deadline coming up, which is August 1, for snapback tariffs on all the other countries that have not agreed to a deal so far. What can you tell American businesses to expect on Friday?
BESSENT: Well, I would think that it's not the end of the world if these snapback tariffs are on for anywhere from a few days to a few weeks, as long as the countries are moving forward and trying to negotiate in good faith.
JAVERS: One of the other big questions around this has been, which of these other sideline issues are really part of this trade deal and which are not? TikTok has been one that we have talked about. You said that wasn't discussed today. The other question is that "The Financial Times" reported that the president of Taiwan was declined permission to transit New York, which is something that the Chinese would have wanted from the U.S. government. Was that done to help smooth a deal with the Chinese?
BESSENT: Yes, and I want to go back for—
JAVERS: Sure.
BESSENT: On -- because the August 1 is important. I think, for President Trump, the -- for me, what's given us a lot of negotiating leverage is, he's happy to do the deal, but he's equally as happy, sometimes in more cases -- in some cases, more happy just to have the tariff income.
JAVERS: Right.
BESSENT: So it gives us a lot of negotiating flexibility. So, TikTok wasn't discussed. And we are very careful to keep trade and national security separate. So, the Taiwanese president -- president's movements had nothing to do with our talks.
JAVERS: Mr. Secretary, we're almost out of time. I'm being told we have just one minute left. So, with that, give us a sense of what you expect next from this U.S.-China relationship. Are we going to see another meeting in 90 days? What city will we be in 90 days from now?
BESSENT: Look, I don't know where we're going to be. The good news is, we're talking, because initially China was -- on April 2, tariff day, we advised all the countries, don't retaliate, and that would be your peak number, and you can work down from there. China was the only country to retaliate. We went into this tit for tat. We ended up at 145. They were 125, which is essentially an embargo. We brought those down in Geneva. There's the problem with the rare earth magnets. That was solved, Geneva, London. And the good news is, President Xi, President Trump have a very close relationship. Now we are able to establish communication lanes at all the various levels, whether it's between Ambassador Greer and myself with the vice premier, with the trade delegations, with the deputy finance minister. So, I think more interaction is good interaction. We're not going to agree. They're tough negotiators. We're tough negotiators. So—
JAVERS: We will see where it goes. Mr. Secretary, thanks so much for being on CNBC.
BESSENT: Good to see you.
JAVERS: Really appreciate your time. Brian, we will send it back to you.