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Treasury Secretary Scott Bessent said Wednesday that while the Trump administration was committed to playing an active role in global financial institutions, it remained focused on addressing large trade imbalances — especially with China, whose economic model Bessent called “unsustainable.”

Bessent’s remarks came amid some growing optimism that President Donald Trump has begun to show signs of softening his tariff push as well as his attacks on Fed Chair Jerome Powell. But Bessent did little to indicate a near-term change to the combative stance with the rest of the world that Trump has taken since returning to office.

While Bessent said that “more than 100 countries” have now approached the U.S. to address trade imbalances, he reasserted a key Trump talking point that the rest of the world — as well as past U.S. presidents — were responsible for harming America’s heartland.  

“For decades, successive administrations relied on faulty assumptions that our trading partners would implement policies that would drive a balanced global economy,” Bessent said. “Instead, we face the stark reality of large and persistent U.S. deficits as a result of an unfair trading system.”  

He continued: “Intentional policy choices by other countries have hollowed out America’s manufacturing sector and undermined our critical supply chains, putting our national and economic security at risk.”

Trump has said he views America’s large trade deficits as a sign that the country is being “ripped off” — a view that other economic commentators dispute, saying the deficits merely reflect that the U.S. simply consumes more goods from around the world than it produces.

The deficit is especially large with China. And while Trump had raised the tariffs rate against imports from that country to as high as 145%, Bessent has signaled the administration’s aggressive posture toward China would likely relax, telling a group of investors Tuesday that the administration was now looking for a “de-escalation” with China, adding that the current situation was “not sustainable,” according to CNBC.

On Wednesday, The Wall Street Journal reported that the White House was now looking to slash potential tariffs by as much as half, with stiffer duties left in place for essential goods — though all would be phased in more slowly.

In response, a White House spokesperson said the administration continued to negotiate with China. 

“President Trump has been clear: China needs to make a deal with the United States of America,” White House spokesman Kush Desai said in a statement. “When decisions on tariffs are made, they will come directly from the President. Anything else is just pure speculation.” 

While the likely softening toward China has helped settle markets, investors remain skittish about the precedent set by Trump’s erratic policymaking.

Other global players are looking to step into the breach Trump has created. In Wednesday remarks, a European Union official said the region was using its “predictability as a strength” as it sought stronger relations with other nations.

“In times of turmoil, predictability, the rule of law and upholding the rules-based international order become Europe’s greatest assets,” said Valdis Dombrovskis, the EU’s Commissioner for Economy and Productivity, in a post on X.

He also told the Wall Street Journal that the EU would not budge on its value-added tax, nor on the agricultural subsidies it provides to the region’s farmers — both targets of Trump criticisms.

Bessent, a former hedge fund manager, has been viewed as the White House’s key liaison to Wall Street. He and Commerce Secretary Howard Lutnick were instrumental in persuading Trump to pursue a 90-day pause in the country-by-country tariffs Trump announced earlier this month. Key U.S. financial figures seemed to have been aware the Bessent’s stock was rising as the White House wrestled with the market meltdown that the tariffs’ announcement had set off.

“Let Scott take the time” to negotiate, JP Morgan CEO Jamie Dimon told Fox News Business just before the pause was announced April 9.

A week later, Bessent told Bloomberg TV that the worst of the market volatility had “likely peaked” as he signaled an “orderly process” on tariff negotiations ahead.

Bessent has also come out ahead after an apparent power-struggle with Elon Musk culminated last week in the replacement of Musk’s pick to head the Internal Revenue Service by a Bessent deputy — just days after the Musk choice had been appointed.  

“Trust must be brought back to the IRS, and I am fully confident that Deputy Secretary Michael Faulkender is the right man for the moment,” Bessent said in a statement, adding that Gary Shapley would remain a top adviser to him on IRS reform.

Sen. Dick Durbin, D-Ill., announced Wednesday that he will not seek re-election in 2026, ending his decadeslong career in Congress.

The decision from Durbin, who is the second-ranking Democrat in the Senate and the ranking member of the Judiciary Committee, will open up a leadership position in the chamber and is expected to set off a competitive primary for his seat in solidly blue Illinois.

“The decision of whether to run for re-election has not been easy. I truly love the job of being a United States Senator. But in my heart, I know it’s time to pass the torch,” he said in a statement Wednesday and video posted to social media. “So, I am announcing today that I will not be seeking re-election at the end of my term.”

Durbin, 80, is tied for the fifth-most senior member of the Senate, having been elected in 1996. Prior to that, Durbin represented Illinois in the House for 14 years.

His decision to step aside creates a vacancy that Illinois Democrats will likely scramble to fill, with a deep bench of federal and local lawmakers who could be contenders for the seat.

A progressive group, 314 Action, recently released a hypothetical poll testing a possible Democratic primary field that included Reps. Lauren Underwood, Raja Krishnamoorthi and Robin Kelly, as well as Lt. Gov. Juliana Stratton. The group, which supports candidates from science and technology backgrounds, has backed Underwood in the past.

Krishnamoorthi has been stockpiling money for years, stoking speculation about a future bid for higher office. H ended the first fundraising quarter of the year with more than $19 million banked away in his campaign account.

Underwood’s campaign closed the same period with $1.1 million to Kelly’s $2 million. And Stratton has dipped her toes into federal politics recently, launching a federal political action committee earlier this year.

Adding to the uncertainty in Illinois, Democratic Gov. JB Pritzker hasn’t confirmed whether he plans to run for re-election next year as he continues to focus heavily on countering President Donald Trump. If he decides to leave the governor’s mansion ahead of a potential 2028 presidential bid, that open seat could draw significant interest among Democrats, too.

Durbin’s seat is expected to remain in Democratic hands, even though Trump made gains in the state in November. Then-Vice President Kamala Harris won Illinois by 11 percentage points, with 54% of the vote.

Senate Minority Leader Chuck Schumer, D-N.Y., who once waged a rivalry with Durbin for the conference leader, praised his work.“His deep commitment to justice, his tireless advocacy for Americans in need, and his wisdom in leadership have left an indelible mark on this institution, the United States, and his beloved Illinois,” Schumer said. “The Senate—and the country—are better because of his service.”

Other Senate Democrats offered praise for Durbin’s congressional career on Wednesday.

“For more than four decades, Senator Dick Durbin has been “a pillar of leadership, integrity, and unwavering dedication to the people of his home state of Illinois and the nation,” Sen. Brian Schatz, D-Hawaii, a leadership member, said in a statement.

LOS ANGELES — A group of California homeowners is taking on insurance companies that they say illegally coordinated to deny coverage to fire-prone areas, leaving thousands of displaced residents drastically underinsured as they fight for funding to rebuild.

The homeowners, many of whom were affected by the recent wildfires that torched large swaths of Los Angeles, have filed a lawsuit alleging that California insurance companies colluded in a “nefarious conspiracy” to shut out high-risk homeowners from the insurance market.

The complaint, filed Friday in Los Angeles County, accuses dozens of major insurance companies and their subsidiaries of collaborating in a “group boycott” of certain areas to eliminate competition and force homeowners toward the state’s insurer of last resort, a program known as the California FAIR Plan.

The lawsuits name California’s largest home insurers, including State Farm, Farmers, Berkshire Hathaway, Allstate and Liberty Mutual. None of them have provided a comment on the allegations.

The FAIR Plan has its own reserves and is intended to provide basic insurance to residents who cannot find a policy through the private marketplace. While it was created by the governor and the Legislature, and the state’s insurance commissioner has oversight, it is not a public program. The insurance companies named in the lawsuit jointly own and operate the FAIR plan, offering terms that limit their risk and place a higher burden on policyholders.

“They knew that they could force people, by dropping insurance, into that plan which had higher premiums and far lower coverages,” Robert Ruyak, an attorney with Larson LLP, the law firm that brought the complaint, said. “They realized that they could take this device, which is to protect consumers, and turn it into something that protected them.”

Ruyak argues the insurance companies knew they could limit their liability by directing policyholders onto the FAIR Plan, which allows companies to recoup up to half of their losses through premium increases, by agreeing that no company would insure high-risk areas.

“All of these insurance companies participate in the California FAIR Plan. They own it and manage it. It is not a California entity, it is not even a separate entity … the only way this scheme would work is if no one would pick up a dropped policy at any price, on any terms. And that’s what happened.”

Millions of U.S. homeowners have in recent years struggled to buy property insurance as companies have increasingly declined to offer coverage to people who live in high-risk areas, particularly as climate change has supercharged some natural disasters. An NBC News analysis in 2023 found that a quarter of all U.S. homes may be at risk of a climate-induced insurance shock.

California has been among the hardest hit by what some have called an “insurance crisis.” The state’s FAIR Plan, meanwhile, has been the subject of growing scrutiny and frustration from insurance regulators and customers.

The plaintiffs are asking for a jury trial and seeking payment for three times their damages. 

A separate class-action lawsuit filed Friday makes similar allegations.

U.S. stocks opened higher Wednesday after President Donald Trump signaled a softer stance toward the eye-watering tariffs he had set for China, while also stating he would not make an immediate change in leadership at the Federal Reserve.

Investors were also cheered by Elon Musk’s imminent return to a more full-time focus on Tesla, dialing back his controversial stint as a Trump White House adviser to one to two days a week.

The S&P 500 climbed 2.5% in early-morning trading. The tech-focused Nasdaq surged 3.5%. Dow Jones Industrial Average gained 750 points or about 1.9%.

Investors also increased demand in U.S. government bonds, lowering borrowing costs — an explicit goal of the Trump administration.

Trump told reporters Tuesday evening that the China tariffs, which on paper have reached as high as 145%, would “come down substantially” as he looked to secure a trade deal.

Those remarks came after Treasury Secretary Scott Bessent told a group of investors earlier in the day that the administration was looking toward “de-escalation” with China. “No one thinks the current status quo is sustainable,” he said according to CNBC, which cited a person present at the investor gathering hosted by JP Morgan.

Trump also said Tuesday he had “no intention” of firing Federal Reserve Chair Jerome Powell, despite calling him a “major loser” and “Mr. Too Late” the day before — a reference to what Trump perceives as dawdling in lowering interest rates.

Economists had warned that any threat to the central bank’s independence would upend global markets and cause U.S. borrowing rates to surge.

With Wednesday’s gains, stocks will have climbed about 8% over the past week and a half.

Yet they remain about 13% off of the highs seen in January, just after Trump’s inauguration. Markets remain bruised — perhaps indefinitely so — by Trump’s erratic policymaking.

Trump changes-of-mind have been a constant of his second term, and there was nothing to suggest that the latest evolution of his thinking would be final.

“With investor concerns growing, U.S. President Trump demonstrated the art of the retreat,” Paul Donovan, chief economist of UBS Global Wealth Management, said in a note to clients.

He continued: “Nonetheless, the erratic threaten-retreat-threaten-retreat cycle has economic consequences. The uncertainty this causes may impact consumer and business decision-making.”

Some commentators believe a more lasting shift by foreign investors away from holding U.S. assets has already begun.

“The U.S. faces a coming adjustment to a lower pace of foreign capital inflows to US asset markets,” Bob Elliott, co-founder, CEO and chief investment officer at the Unlimited Funds asset management group, said in a post on X Wednesday.

Meanwhile, tech stocks were poised to get a significant boost from comments by Musk, the CEO of the electric carmaker Tesla, during the company’s first-quarter earnings report to investors Tuesday afternoon.

While the company said profits had shrunk dramatically in the first-three months of the year, Musk said he was actively winding down his role advising the Department of Government Efficiency, the quasi-official Trump project that has upended the federal workforce.

Before the market open at 9:30 a.m., Tesla shares were up as much as 7%.

“Musk made a huge move forward as his time in DOGE/White House now winds down and he will be laser focused on Tesla again,” Dan Ives, managing director at Wedbush Securities, said on X Wednesday. “Musk finally read the room and made a pivot which helps remove the black cloud over Tesla. New chapter begins.”

Ives said his new long-term price target for Tesla’s stock was $350; as of Tuesday, the stock had closed at about $238, implying a 47% gain.

Others remained cautious that Tesla could recover in a short amount of time from the 50% drop its share price has seen over the past several months. On the earnings call with investors, Musk said the company was still on track to roll out commercially viable robotaxis, humanoid robots and full-self-driving capabilities.

“We remind investors that TSLA has historically delivered stunning technical achievements, but often delivered later than initially promised,” analysts with the Truist financial group said in a note to clients. “We maintain an open mind.”

A massive wildfire continued to burn in New Jersey on Wednesday, spanning over 8,500 acres and prompting the evacuation of 3,000 people, which snarled traffic and sent huge plumes of black smoke billowing into the sky. 

The Jones Road Wildfire started in the Greenwood Forest Wildlife Management area in Ocean County on Tuesday afternoon and exploded in size to 8,500 acres by 10:30 p.m., the New Jersey Forest Fire Service said. 

The blaze was fueled by strong 25 mph gusts that whipped through the area. As of Tuesday evening, the fire is only 10% contained. 

The cause of the fire remains under investigation. But long-term drought conditions, strong winds, and warm weather contributed to its spread.

Acting New Jersey Governor Tahesha Way declared a state of emergency effective at 7 a.m. Wednesday, in response to the fire in Ocean County. 

The inferno threatens 1,320 structures and has prompted the evacuation of 3,000 residents from Ocean and Lacey Townships in Ocean County.

Ocean Township and Lacey Township police said all mandatory evacuation orders were lifted as of 6:30 a.m. Wednesday. 

More than 25,000 customers don’t have electricity on Wednesday morning after officials turned off power to keep fire crews safe.

“Power is expected to remain out with no timetable for return. Crews are actively surveying their infrastructure for damage,” Ocean Township police said.  

Ocean Township reported no structural damage from the fire, but Lacey Township did report some.

The fire also triggered a major traffic slowdown Tuesday evening with road closures along the Garden State Parkway. This morning, the New Jersey State Police announced that the Garden State Parkway and Route 9 near the fire zone are now open again.

Harrowing videos and photos shared on social media show orange flames consuming the forest area, and thick orange and black smoke rising into the sky.

There are high fire danger conditions in central and southern Jersey on Wednesday. However, there is some respite with cooler temperatures and lighter winds. Relative humidity will be in the 20-40% range.

This morning, the smoke will impact areas across southern New Jersey, including Atlantic City. By the afternoon, a 180-degree wind shift will push smoke north toward the New York City metro area by tonight. By Thursday morning, smoky skies are possible for New York City, parts of Long Island, and north-central New Jersey.

The New Jersey Forest Fire Service will hold a fire update at 11 a.m. 

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