By Aldgra Fredly and Jacob Burg in The Epoch Times,
Treasury Secretary Scott Bessent said on May 18 that reciprocal tariffs could return to the levels imposed by President Donald Trump on April 2 if trading partners fail to negotiate in good faith.
On April 2, Trump announced a tariff of at least 10 percent on almost all imports, and about 60 countries considered the “biggest offenders” in trade imbalances with the United States were subject to higher taxes as part of efforts to eliminate the trade deficit.
He then gave most countries a 90-day pause to allow time for negotiations, while maintaining a 10 percent tariff as the base rate.
On NBC’s “Meet the Press,” Bessent said the final tariff rate will depend on whether trading partners are willing to negotiate trade agreements in good faith.
“Some countries were at 10 percent, some were significantly higher,” he said. “And the negotiating leverage that President Trump is talking about here is that if you don’t want to negotiate, it goes back to the April 2nd level.”
Bessent said those who fail to negotiate in good faith will receive a letter informing them of the tariff that will be imposed on them.
“That means they are not negotiating in good faith,” he added. “So I would expect everyone to come and negotiate in good faith.”
His remarks followed Trump’s May 16 announcement that Bessent and Commerce Secretary Howard Lutnick would begin sending letters to trading partners in the coming months outlining tariffs on their goods.
“I guess you could say they can appeal it, but overall I think we’re very fair,” Trump said at an event in the United Arab Emirates on May 16.
Trade negotiations
Several countries, including India and South Korea, have been holding trade talks with the United States in recent months to avoid Trump’s tariff hikes before the break ends.
Earlier this month, Trump announced that he had reached a trade agreement with the UK and that it would be “a great deal for both countries.”
“The agreement includes billions of dollars in increased market access for American exports, particularly in agriculture, dramatically increasing access to American beef, ethanol and virtually all the products produced by our great farmers,” he said at a press conference in the Oval Office on May 8.
Trump said the UK would speed up customs clearance for American goods and that “there will be no red tape, things will move very quickly in both directions.”
Under the agreement, US tariffs on British cars will fall to 10 percent for the first 100,000 vehicles imported, and steel tariffs will be eliminated entirely.
Trump announced last week that India had offered the United States a zero-tariff trade deal, although a final decision has not yet been made.
Indian Foreign Minister S. Jaishankar has stressed that any trade agreement with the United States must be “mutually beneficial” and serve the interests of both countries.
India has reduced tariffs on some US products, such as bourbon whiskey, motorcycles, information and communication technology products and metals, while improving market access for US agricultural products and medical devices, in a bid to secure a trade deal with the United States, according to a joint statement on February 13.
On May 12, Trump reduced the tariff on Chinese imports to 30 percent after reaching an agreement with China to suspend trade measures. This in turn reduces China’s tariff by 115 percentage points to 10 percent, and Beijing cancels its retaliatory measures.
Before the agreement, China responded to U.S. tariffs with tariffs of its own, sparking a back-and-forth dispute that saw U.S. tariffs on Chinese imports rise to 145 percent.
Moody’s downgrades rating
Additionally, Treasury Secretary Bessent said on May 18 that he was not concerned about Moody’s recent downgrade of the U.S. credit rating from Aaa to Aa1 and defended President Donald Trump’s tariffs and sweeping tax cut bill.
On CNN’s “State of the Union with Jake Tapper” on May 18, Bessent said that Trump’s bill, which would extend tax cuts enacted in 2017 during the president’s first term, would boost economic growth.
Bessent said faster economic growth is more important than “potential debt growth.”
“So we’ve tried to reduce spending and increase revenue. So we’re growing [gross domestic product] faster than the debt is growing, and that stabilizes the debt-to-GDP ratio,” he said.
Some Republican lawmakers are concerned that the bill does not adequately address the growing debt. The United States’ debt currently stands at $36.2 trillion.
The Committee for a Responsible Federal Budget estimates that the current bill would add $3.3 trillion to the national debt, including interest, or “$5.2 trillion if its temporary provisions are made permanent.”
On May 16, Moody’s Ratings downgraded the United States’ long-term credit rating from Aaa to Aa1, citing steadily rising debt, rising interest payments, and a lack of policy action to curb chronic budget deficits.
“Successive US administrations and Congress have failed to agree on measures that would help reverse the trend of large annual budget deficits and rising interest costs,” the bank said in a May 16 statement.
Bessent said on May 18 that he did not believe much in Moody’s downgrading.
“[The] history of [rating agencies] is that by the time they downgrade, everything is already in the market,” he said.
“I think what’s important is that President Trump has just returned from this historic trip to the Middle East and trillions of dollars are coming into the United States. So we’re seeing investor confidence.”
This move robbed the country of its last perfect credit rating among the three major credit agencies.
