[CTC] Scott Bessent says tariff rates will return to ‘reciprocal’ levels if countries don’t reach trade deals with US

[Arthur Stamoulis]

https://www.cnn.com/2025/05/18/business/scott-bessent-trump-tariffs-china
Scott Bessent says tariff rates will return to ‘reciprocal’ levels if
countries don’t reach trade deals with US
By Auzinea Bacon, CNN
Updated 11:48 AM EDT, Sun May 18, 2025



Tariff rates will soon return to a “reciprocal” level if countries don’t
reach trade agreements during the 90-day pause, Treasury Secretary Scott
Bessent said Sunday.

“President Trump has put them on notice that if you do not negotiate in
good faith, you will ratchet back up to your April 2 level,” Bessent said
on CNN’s “State of the Union with Jake Tapper.”

There are 18 “important” trading partners that the United States is most
focused on solidifying deals with, Bessent said. He did not say how quickly
tariff rates could revert to “reciprocal” rates.

“There are a lot of smaller trading relationships that we can just come up
with a number. My other sense is that we will do a lot of regional deals —
‘this is the rate for Central America, this is the rate for this part of
Africa,’” Bessent added.

President Donald Trump announced a slate of “reciprocal” tariffs on April
2, which he called “Liberation Day.” He later paused those levies for 90
days, which lowered rates to a baseline rate of 10%.

On Friday, Trump said that time is running out for countries to make a
trade deal with the United States.

“We have, at the same time, 150 countries that want to make a deal, but
you’re not able to see that many countries,” Trump said during a business
roundtable in Abu Dhabi. “So at a certain point, over the next two to three
weeks, I think (Bessent) and (Commerce Secretary Howard Lutnick) will be
sending letters out, essentially telling people — we’ll be very fair — but
we’ll be telling people what they’ll be paying to do business in the United
States.”

Markets soared on Monday after Bessent and US Trade Representative Jamieson
Greer outlined a temporary de-escalation of a trade war with China in
Geneva, Switzerland, with the United States lowering tariffs on Chinese
imports from 145% to 30%, and China lowering duties on US goods from 125%
to 10%. The S&P 500 last week surged 5.3% with five consecutive sessions
of gains.

*Tariffs put pressure on businesses, consumers*
Bessent was also asked about the whiplash and uncertainty caused by Trump’s
tariffs. He responded that the administration’s negotiating tactic is
“strategic uncertainty.”
“If we were to give too much certainty to the other countries, then they
would play us in the negotiations. I am confident that at the end of these
negotiations, both the retailers, the American people and the American
workers will be better off,” Bessent said.

When asked about the impact tariffs will have on small businesses that rely
on products made in China, Bessent responded that he thinks the United
States “will continue trading with China in the kinds of products that
these small businesses are talking about at lower tariff levels.”

Many American small businesses face serious risks, as costs have
skyrocketed and growth plans are uncertain due to fluctuating tariff rates.

Companies pass on tariff costs to customers by raising prices to avoid
narrowing margins, a notion the Trump administration has repeatedly
disputed.

Retail giant Walmart is among the most recent American companies that
warned of price increases. On Saturday, Trump told the company in a post to
Truth Social to “eat the tariffs.”

Bessent said he spoke directly with Walmart CEO Doug McMillon on Saturday.

“Walmart will be absorbing some of the tariffs, some may get passed on to
consumers,” Bessent said.

*The US loses its last perfect credit rating*
Moody’s Ratings on Friday downgraded the United States’ debt, which held an
outstanding rating of AAA. Moody’s dropped the US debt rating to Aa1,
joining the two other major credit rating agencies Fitch Ratings and S&P,
which lowered ratings for US debt in 2023 and 2011, respectively. Moody’s
cited concerns about the nation’s growing $36 trillion debt amid
gridlock in Congress over a White House budget bill that the Committee for
a Responsible Federal Budget estimates would add $3.3 trillion to the debt
in the next 10 years.

Bessent told CNN on Sunday that he “does not put much credence in the
Moody’s” downgrade.

The downgrade could lead more investors to believe lending money to the
government is more risky, potentially causing US Treasury yields to rise.
The US Treasuries, particularly the 10-year US Treasury, influence various
debt, including mortgage rates for American homes and contracts written
around the world.
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