Treasury Secretary Scott Bessent announced on Sunday that unless major trading partners, such as Taiwan and the European Union, come to an agreement with Washington, U.S. tariffs will go into effect on August 1.
On April 2, former President Donald Trump first declared that the tariffs would return to their high levels. To give time for trade talks, the tariffs had been temporarily halted. Deals were supposed to be finalised by July 9.
“These rates will return—and they’re very high in some cases,” Bessent told CNN. His statements supported those made by President Trump earlier Friday when he told reporters on Air Force One, “Well, I’ll probably start them on August 1.”
Trump claimed to have signed about a dozen letters on Sunday alerting nations to the impending rate hikes, which will be sent out on Monday. Several agreements have already been finalised, he said, adding, “I think we’ll have most countries done by July 9 — either a letter or a deal.”
The U.S. Commerce Secretary, Howard Lutnick, stood next to Trump and confirmed that tariffs would start on August 1: But at the moment, he continued, “the President is setting the rates and the deals.”
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Trade Talks Underway
Imports from almost all of the Trump administration’s key trading partners were subject to a 10% charge as part of a larger trade action that was announced in April. Soon after, a second wave of higher charges was scheduled, but it was postponed to allow for compromise.
Countries have been actively seeking exemptions through bilateral agreements ever since. Agreements have already been made between the United States and Vietnam and the United Kingdom, and talks with China have resulted in a temporary relaxation of exceptionally high duties.
“I anticipate some significant announcements over the next few days,” Bessent stated, adding that “we’re close to several deals.” “I don’t want to let them off the hook,” he said, refusing to name which nations were close to reaching an agreement.
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Hardball Strategy
Speaking from Air Force One, Trump claimed that it was easier to notify nations of the new tariffs than to hold several rounds of negotiations. “If you wish to do business with the United States, you must pay this amount,” he stated.
Bessent retorted when asked on CNN if the government was relying on threats rather than sincere negotiations. He declared, “This isn’t a new deadline.” “This is when it’s happening,” we say. It’s fantastic if nations wish to move more quickly. Otherwise, the tariffs are reinstated.
The U.S. strategy, according to Bessent, is one of “maximum pressure,” using the European Union as an example. Negotiations with the EU are now “making very good progress” after a sluggish start, he said.
Over the weekend, discussions with representatives of the EU proceeded. The finance minister of France was hopeful that a compromise might be achieved soon on Saturday.
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Global Reactions and Economic Concerns
While some countries have made progress, others are still cautious. Japan “won’t easily compromise” in trade negotiations with the United States, according to remarks made by Japanese Prime Minister Shigeru Ishiba on Sunday.
BRICS leaders, who include Brazil, Russia, India, China, and South Africa, expressed strong opposition at a Rio de Janeiro conference. They cautioned that the U.S. tariffs were “indiscriminate,” damaging to international trade, and possibly unlawful.
Bessent dismissed worries that the tariffs may cause inflation in the United States. On Fox News Sunday, he stated that inflation is a widespread monetary phenomenon. “We have not even witnessed the one-time price changes that some were afraid of.”