U.S. Treasury Secretary Scott Bessent said in a Tuesday speech that the ongoing tariffs showdown against China is unsustainable and expects a "de-escalation" in the trade war between the world's two largest economies.

But in a private speech in Washington for JPMorgan Chase, Bessent also cautioned that talks between the United States and China had yet to formally start. Trump placed import taxes of 145% on China, which has countered with 125% tariffs on U.S. goods.

Trump has placed tariffs on several dozen countries, causing the stock market to stumble and interest rates to increase on U.S. debt as investors worry about slower economic growth and higher inflationary pressures.

Details of the speech were confirmed by two people familiar with the remarks who insisted on anonymity to discuss them.

“I do say China is going to be a slog in terms of the negotiations,” Bessent said according to a transcript obtained by The Associated Press. “Neither side thinks the status quo is sustainable.”

The S&P 500 stock index rose after Bloomberg News initially reported Bessent's remarks.

The Trump administration has met for talks with counterparts from Japan, India, South Korea, the European Union, Canada and Mexico, among other nations. But Trump has shown no public indications that he plans to pullback his baseline 10% tariff, even as he has insisted he's looking for other nations to cut their own import taxes and remove any non-tariff barriers that the administration says have hindered exports from the U.S.

White House press secretary Karoline Leavitt told reporters Tuesday that Trump told her “we’re doing very well” regarding a “potential trade deal with China.”

China on Monday warned other countries against making trade deals with the United States that could negatively impact China.

“China firmly opposes any party reaching a deal at the expense of China’s interests,” China’s Commerce Ministry said in a statement.

Leavitt said the Trump administration has received 18 proposals from other countries for trade deals with the U.S., adding that “everyone involved wants to see a trade deal happen.”

The uncertainty over tariffs in the financial markets has also been amplified by Trump calling on the Federal Reserve to cut its benchmark interest rate, with the president saying he could fire Fed Chair Jerome Powell if he wanted to do so.

Leavitt said Trump believes the Fed has by holding rates steady as it awaits the impacts of tariffs “in the name of politics, rather in the name of what’s right for the American economy.”