President Donald Trump’s reciprocal tariffs unveiled Thursday are no guarantee to go into effect this spring, hinted the Trump administration’s top-ranking economic advisor, the latest wrench in the week Trump teased as the most consequential for his signature tariffs, which has arguably provided more questions than answers.
Scott Bessent, left, joins President Donald Trump earlier this month.
Asked by Fox Business if Trump will enact the reciprocal tariffs by April, Treasury Secretary Scott Bessent responded, “we will see how our trading partners choose to respond.”
“But I can tell you that if he needs to, he will implement them,” Bessent continued, noting if other countries “want to bring all these barriers down, we will have more frictionless global trade.”
Bessent’s comments left far more room for trade diplomacy than Trump’s comments earlier this week did, but the Treasury chief added with Trump, “you should take him at his word: This is not theater.”
“These could be very, very substantial if they don’t want to take their tariffs down,” Bessent said.
Bessent was one of seven officials ordered Thursday by Trump to conduct a study on reciprocal tariffs, an analysis Commerce Secretary Howard Lutnick said will conclude April 1. Bessent said Friday he hopes to create a so-called “reciprocal index” studying the levies placed by trading partners on U.S. goods including “outstanding tariffs, non-tariff trade barriers and currency manipulation.” The U.S. will match opposing tariffs “percent for percent, dollar for dollar,” proclaimed Bessent. That provides some further clarity on what the reciprocal tariffs, which Trump deems the “BIG ONE,” will look like, but two critical questions remain in the rates the U.S. will actually charge on imports and when they’d go into effect. Bessent’s Treasury gets any tariff revenues, though Trump has floated an “External Revenue Service” to collect the levies. Earlier this week, Deutsche Bank economists estimated that the U.S.’ average effective tariff rate will rise from 1.5% to 4.8% under the reciprocal tariff measures, leading to an up to 0.5 percentage-point increase in core inflation.
“The broad scope and long lead time” of the reciprocal tariffs “suggest that the plan might have been floated to encourage negotiation with trading partners,” remarked Jan Hatzius, Goldman Sachs’ chief economist, in a Thursday evening note to clients.