*

Bessent tells Chinese vice premier that US will protect

workers

*

He Lifeng raises concerns about Trump's tariffs on Chinese

goods

*

US has long urged Beijing to rebalance economy towards

consumption

(Updates with U.S. Treasury readout, paragraphs 1-3, details on

U.S. economic policy advice, paragraphs 13-19, changes dateline

to Washington)

By David Lawder

WASHINGTON, Feb 21 (Reuters) - U.S. Treasury Secretary

Scott Bessent traded policy complaints with Chinese Vice Premier

He Lifeng on Friday, telling Beijing to do more to curb fentanyl

trafficking and rebalance its economy, while hearing He's

concerns about President Donald Trump's new tariffs, the two

governments said.

The top economic officials from the world's two largest

economies agreed to keep up communications going forward, the

Treasury said in a readout of the introductory video call.

"Secretary Bessent expressed serious concerns about the

PRC's counternarcotics efforts, economic imbalances, and unfair

policies, and stressed the Administration's commitment to pursue

trade and economic policies that protect the American economy,

the American worker, and our national security," the Treasury

said.

Earlier, Chinese state media reported that He expressed

concerns to Bessent over U.S. tariffs and trade restrictions on

China during the call.

The two sides had an "in-depth" exchange of views on

important issues in China-U.S. economic relations, and both

agreed to keep communicating on matters of mutual concern,

according to a readout released by Chinese state media.

He, the lead China-U.S. trade negotiator on the Chinese

side, and Bessent recognised the importance of bilateral

economic and trade relations, the readout added.

MORE TARIFFS

China and the U.S. are seeking to manage their relationship

as the world's two largest economies stand on the precipice of a

renewed trade war.

U.S. President Donald Trump imposed 10% tariffs on all

Chinese goods in early February, citing China's failure to

stanch fentanyl trafficking.

Beijing retaliated by imposing targeted tariffs of up to 15%

on some U.S. imports including energy and farm equipment and put

several companies, including Google, on notice for possible

sanctions.

Trump has also planned further reciprocal tariffs for all

countries that tax U.S. imports, a move that is likely to

further escalate global trade tensions. During his election

campaign, Trump threatened 60% tariffs on all Chinese imports.

Trump said earlier this week he expected Chinese President

Xi Jinping to visit the U.S., without giving a timeline for his

trip.

Bessent said on Thursday he would tell his Chinese

counterpart that China needed to rebalance its economy and rely

more on domestic consumption for growth and less on investment

and exports.

"They are suppressing the consumer in favor of the business

community," Bessent told Bloomberg Television.

SIMILAR ARGUMENTS

The U.S. had a $295.4 billion goods trade deficit with China

in 2024, down from a peak of $418.2 billion in 2018, the year

Trump began imposing new tariffs on some $370 billion of Chinese

imports.

But last year's deficit rose $16.3 billion from 2023 as

Chinese exporters rushed to beat a new round of Trump tariffs.

Bessent's predecessor, former Treasury secretary Janet

Yellen, met several times with He in recent years and lodged

similar complaints about China's state-led economic policies.

She argued during a trip to China last year that those

policies were leading to excess production capacity that was

threatening the viability of firms in the U.S. and other market

economies, a warning that laid the groundwork for former

President Joe Biden's steep tariff hikes on electric vehicles,

semiconductors and solar products.

He and other Chinese officials never accepted U.S.

excess capacity assertions, arguing that China's EV and other

key industries are simply more competitive.

(Editing by Nia Williams)