G20 Summit Closes With China the Lone Holdout as Bessent Predicts Hormuz Strait Bypass Within Two Years

Since Bessent told reporters in Asheville on September 1 that Iran's economy could collapse "within weeks or months," the G20 finance summit he hosted has wrapped up. The reverberations are now visible in bond and currency markets from Tokyo to Washington.

China Stands Alone

Bessent said Tuesday that every G20 member except China signed onto the joint summit statement, according to the Epoch Times. The holdout centered on language about sovereign debt restructuring and reducing global imbalances.

"All but one member of the G20 was able to reach consensus," Bessent said, later identifying China by name as "the country with the world's largest and unsustainable current account surplus." He told Reuters the world "cannot have a China with a $1.2 trillion trade surplus."

A Rocky Two Days

The summit itself was not a smooth affair. LiveMint reported the gathering unfolded amid a global bond-market selloff, a trade spat with Canada, and a controversy over a Pentagon social media post.

Bessent said it was unrealistic for Canada to wage a trade war with a country "13 times larger," and joked about Canadian amusement-park submarines, per LiveMint. Defense Secretary Pete Hegseth separately posted a photo of two women at a Canadian cadet training center that LiveMint reported was widely interpreted as mocking their weight and gender. Canadian Prime Minister Mark Carney told reporters in Ottawa the U.S. needed to "stop doing memes, stop throwing shade" before serious trade talks could resume. The Treasury Department did not respond to LiveMint's requests for comment.

Bessent also compared Iran to "a dying snake still wriggling after decapitation," language LiveMint said signals Washington's willingness to accept more economic pain to pressure Tehran.

The Hormuz Bet Markets Aren't Buying

In a separate exchange with Larry Kudlow during the summit, Bessent argued the Strait of Hormuz will be "bypassed" within two years, citing three pipeline projects: Saudi Arabia's East-West pipeline moving 7 million barrels a day via the Red Sea, the UAE's Fujairah-linked line set to expand from 1.8 million to 3.6 million barrels a day by 2027, and a proposed $15 billion, four-year Iraq-to-Syria pipeline, according to reporting cited by a Japan-focused trading newsletter that referenced OilPrice.com and Bloomberg.

Oil prices did not move like a problem was being solved. WTI crude sat at $91.79 a barrel, up 1.74%, and Brent hovered near $95, levels that suggest traders are not pricing in an imminent Hormuz workaround. The pipelines also move crude, not liquefied natural gas, meaning LNG shipments through the strait have no comparable bypass in the works.

On Wednesday, Tokyo's Nikkei fell as much as 1,500 points, or roughly 2.6%, from Tuesday's close of 66,202 to around 64,500, with Japan's Nikkei newspaper attributing the drop to concern over high oil prices and rising interest rates. Japan's 10-year bond yield hit 2.990%, a 30-year high, a day after touching 3.005%. The yen weakened to 160.29 per dollar. SoftBank Group fell 4.85%, Tokyo Electron dropped 3.86%, and even Toyota, typically a beneficiary of a weaker yen, fell 3.05%.

Growth Versus the Bond Market

Bessent's broader pitch at the summit was that the U.S. can grow its way out of debt. "The only way out of this is to grow out of it," he said, and when asked about bond market turmoil, replied he didn't know "where there's bond market chaos."

That claim sits against some uncomfortable numbers. Global debt has climbed to roughly $353 trillion in 2026. The U.S. 10-year Treasury yield sits at 4.75% and the 30-year at 5.2%. LiveMint noted the U.S. economy lost 23,000 jobs in July and inflation remains above the Federal Reserve's target, even as Bessent described the economy as having been "backed over by the Biden Mack truck" and now "in the healing portion."

Xi's Countermove in Bishkek

While Bessent isolated China at the G20, Xi Jinping was in Bishkek, Kyrgyzstan, pitching the Belt and Road Initiative at the Shanghai Cooperation Organization summit, according to Breitbart. Xi pledged an AI cooperation center, a combined 10 million kilowatts each of new solar and wind capacity across SCO countries, and 100 technology projects over the next three years.

The pitch comes as debtor pushback grows. A May 2025 Lowy Institute report found the world's poorest countries paid a record $22 billion to China in debt repayments, transforming Beijing's role from lender to collector. India, the SCO's second-largest member, remains opposed to the China-Pakistan Economic Corridor, and Kyrgyzstan itself has seen protests over BRI debt loads and Chinese labor imports on local projects.

The Tariff Counter-Argument

Al Jazeera reported Bessent is urging other G20 members to adopt tariffs against China, arguing Beijing's trade surplus is "sucking growth" from the rest of the world. China's exports rose 23.9% year-on-year in July, adding urgency to European calls for tougher import curbs.

But the same policy carries a documented cost at home. The Tax Foundation found the tariffs the Trump administration imposed through 2025 raised the retail price of imported consumer goods by roughly 7% relative to pre-tariff trends, a burden Al Jazeera noted falls on American consumers and, in Canada's case, an ally now openly feuding with Washington over trade tone.

The open questions now sit with the tape, not the podium. Traders are watching whether Japan's next super-long bond auction breaks further after 30-year yields already touched 4.18%, whether the Federal Reserve's September 15-16 meeting slows the pace of balance-sheet runoff, and whether actual tanker traffic through Hormuz shifts at all, since Bessent's two-year timeline is a forecast, not a fact on the water yet.