US Treasury's Bessent says Russia could win sanctions relief in war talks

Russia could win some relief from US sanctions based on its willingness to negotiate an end to its war in Ukraine, US Treasury secretary Scott Bessent told Bloomberg Television in an interview on Thursday.

Bessent also said he would speak with his Chinese counterpart on Friday and urge China to rebalance its economy towards increased consumer spending.

Asked whether the US was prepared to increase sanctions on Russia or reduce them depending on how talks to end the Ukraine war go, Bessent said: “That'd be a very good characterisation.”

He added: “The president is committed to ending this conflict very quickly.”

President Donald Trump has said he may meet Russian President Vladimir Putin this month to discuss ending the war.

Bessent in the interview declined to provide timing for a Trump-Putin meeting, but confirmed that he would not attend next week's G20 finance ministers and central bank governors meeting in South Africa “due to some domestic considerations”.

During his US Senate confirmation hearing, Bessent said he would support increasing US sanctions on Russian energy, especially oil majors, if Trump asks him to.

The Treasury chief criticised Ukrainian President Volodymyr Zelensky for failing to sign a $500bn (R9.19-trillion) deal to provide critical minerals to the US and for escalating a war of words with Trump. The US president accused Zelensky of being a “dictator”.

Bessent said Zelensky “assured me that he would sign the minerals deal in Munich and he has not”. He described the minerals supply arrangement as part of an “elegant plan” to bring Ukraine closer to the US orbit.

Zelensky on Wednesday rejected the US demands for Ukraine to repay Washington that much in mineral wealth for wartime aid, saying the US had supplied nowhere near that sum so far and offered no specific security guarantees in the agreement.

CHINA REBALANCING ARGUMENT

In the “introductory” call with his Chinese counterpart, Bessent said he would urge economic reforms to encourage more domestic consumption.

China's foreign ministry said Vice-Premier He Lifeng would speak with Bessent on Friday in a video call initiated by the US side to communicate important issues in the economic field between the two countries.

Bessent's predecessor, Janet Yellen, regularly spoke and met with He.

The same argument, that China should rely less on exports for growth, was made repeatedly by Yellen and numerous other US Treasury secretaries over the years. But China has continued its investment and export-led policies.

“The Chinese need to rebalance their economy in favour of consumption — that they are suppressing the consumer in favour of the business community,” Bessent said.

DEBT ISSUANCE UNCHANGED

Bessent said any move to increase the share of longer-term Treasuries in government debt issuance is some way off, given hurdles including the Federal Reserve’s quantitative tightening programme.

During Trump's election campaign, Bessent was critical of Yellen's heavy reliance on issuing shorter-term bills, which typically carry lower interest rates. He argued it was aimed at boosting short-term growth, a strategy that Yellen denied.

“That's a long way off, and we're going to see what the market wants,” Bessent said when asked about shifting to longer-term issuance. “It's going to be path dependent.”

He dismissed speculation the US government might revalue its gold holdings in an effort to reduce borrowing needs or to fund the creation of a sovereign wealth fund, the report added.