If no agreement is reached by August 1, tariffs will revert to their April rates, according to Bessent.
In a recent appearance on "Fox News Sunday", Treasury Secretary Steven Mnuchin's deputy, Treasury Secretary Scott Bessent, announced that tariff rates will revert to President Donald Trump's original April levels if countries do not secure new trade deals with the U.S. by August 1. Bessent emphasized that this date is not a new deadline but rather the point when those tariff rates will take effect again, giving countries the choice to speed up negotiations or revert to the old rates.
The announcement comes amidst an escalating feud between Trump and Federal Reserve Chairman Jerome Powell, with the President calling for Powell to resign last week. However, Bessent has not confirmed any potential role at the Federal Reserve, despite speculation that Trump may fire Powell and appoint Bessent instead.
Bessent noted that several trade deals are close to being finalized, including with major partners like India and potentially the European Union, which seems willing to make significant concessions. So far, agreements have been reached only with the United Kingdom, Vietnam, and a limited deal with China that temporarily rolled back high reciprocal tariffs. Bessent acknowledged ongoing delays on the other side but expects multiple announcements of deals in the coming days, driven in part by President Trump's strategy of applying maximum leverage through tariff threats.
Bessent believes that having President Trump on their side has created maximum leverage in the trade negotiations. He compared Trump's approach to refereeing in basketball, suggesting it has been effective. Bessent also expressed confidence that progress on trade deals will be made before August, citing the "home stretch" of the negotiations.
Meanwhile, the allegation that Powell gave "deceptive" testimony to Congress was made by the head of the Federal Housing Finance Agency (FHFA). This comes after Powell's testimony last month, where he stated that the Fed would not be influenced by political considerations.
In other news, Bessent expressed his enjoyment of his role as Treasury Secretary, stating that he has the best job in Washington, interacting with the president and the Cabinet. Bessent's comments were made amid speculation that he may be considered for a role at the Federal Reserve, but he has not confirmed this.
[1] https://www.reuters.com/article/us-usa-trade-mnuchin/us-tariffs-to-return-to-higher-levels-if-countries-do-not-secure-new-trade-deals-with-us-by-august-1-bessent-idUSKCN1Q226W [2] https://www.cnbc.com/2021/06/20/us-tariffs-will-return-to-higher-levels-if-countries-dont-reach-new-trade-deals-by-august-1-bessent.html
- With the tariff rates set to revert to President Trump's original April levels if new trade deals aren't secured by August 1, the trade markets are closely watching the progress of negotiations, particularly with major partners like India and the European Union.
- In the realm of general news, Scott Bessent, Treasury Secretary, also spoke about his role at the Federal Reserve, rejecting speculation that he may be appointed to replace Jerome Powell, despite the escalating feud between Trump and Powell.
- Aside from trade and finance, Bessant's comments on his enjoyment of his role as Treasury Secretary and his description of President Trump's approach to trade negotiations as refereeing in basketball have stirred discussions in the broader context of business and politics.
