- Call for de-risking not full decoupling from China.
- Encourages diversified global supply chains.
- Potential for increased scrutiny on stablecoins.
Bessent’s policy highlights the need to reduce global dependency on China, affecting international trade dynamics and raising macroeconomic uncertainty.
De-Risking vs. Decoupling
Bessent, recently appointed as U.S. Treasury Secretary, advocates for de-risking instead of full decoupling from China’s supply chains due to its substantial role in global manufacturing. This stance reflects policy experiences during the COVID-19 pandemic and seeks to ensure broader industrial supply reliability.
China’s Manufacturing Share
He argues that China’s 30% share in manufacturing is excessive and underscores a need for alternative strategies to stabilize global markets. Bessent’s testimony suggests a strong governmental focus on supply chain diversification and reinforces an allied-supply resilience framework.
“We do not want to decouple, but we do need to de-risk, as we saw during COVID, whether it was with semiconductors, medicines, [or] other products. We are in the process of de-risking, making the United States less reliant on China, but…the whole world [is] because…China is holding back products that are essential for the industrial supply chains of India, of Europe. That is not what a reliable partner does.” — Scott Bessent, U.S. Treasury Secretary
Impact on Digital Assets
Bessent’s policy stance could have implications for digital assets and related markets. While no immediate crypto-market shifts were reported, historical patterns indicate potential impacts on stablecoins due to risk sensitivities and geopolitical tensions.
Economic strategies targeting China might alter investment flows in international markets. U.S. encouragement of diversified supply chains could influence American and allied regions, affecting traditional and digital asset infrastructures.
Insights from historical trends suggest increased interest in decentralized finance solutions and stablecoins as hedges due to macroeconomic uncertainties. The digital asset market may experience heightened demand and regulatory focus, particularly on cross-border and privacy-focused products.
