U.S. Treasury Secretary Bessent: If negotiations stall on August 1, a 40% tariff will be imposed, and Powell's future will be decided by President Trump.

U.S. Treasury Secretary Scott Bessent stated in an interview this morning on 7/22 that the U.S. is in no hurry to finalize a trade agreement before 8/1, as tariff pressures will make trade partners more eager to negotiate favorable terms, with a 40% tariff imposed again if progress stalls as of 4/2. President Trump may not immediately fire Federal Reserve Chairman Powell, but Fed reforms are imperative. Regarding the productivity revolution brought by AI, Bessent remarked that it will lead to non-inflationary growth. The Fed may have the opportunity to cut interest rates in the future to rescue the housing market, bringing the U.S. back to the golden era of the 90s characterized by "high growth and low inflation."

8/1 Negotiations stagnate with a 40% tariff return, Indonesia makes multiple concessions, and China's exports become a topic.

In response to ongoing external concerns about the progress of tariff negotiations between the United States and its global trade partners, Bensent stated that the negotiations are indeed advancing, but more emphasis will be placed on the content and quality of the agreement, and there will be no hasty signing before the deadline of August 1. He emphasized that President Trump is creating maximum negotiation leverage through high tariffs, with the aim of addressing trade imbalances that have accumulated over 20 to 40 years.

He later added that August 1 would not be the deadline. If tariffs return to the 40% rate announced on April 2, the United States will continue negotiations. He emphasized:

"Each trading partner has been clearly informed that if negotiations stall, tariffs will revert to the standards of 4/2."

Then, Besant took Indonesia as an example, stating that after multiple rounds of negotiations, Indonesia agreed to purchase a large quantity of American agricultural products and Boeing airplanes, and to eliminate nearly 11,000 tariffs and non-tariff barriers.

Speaking of China, he pointed out that the recent relaxation of the export of Nvidia H20 chips by the United States is considered an "olive branch" thrown to China, but the next discussions will start on the large imports from Iran and Russia that are under sanctions, as well as the excessive export of manufactured goods impacting the global market. Besant emphasized:

"China accounts for 30% of global manufacturing exports, and this proportion cannot increase any further; it is better to reduce it."

The EU is eager to talk, but the coordination among the 27 member states is slow.

In response to Trump's intention to increase tariffs on the EU to over 15%, Europe is also preparing retaliatory tariffs. Bessent stated that the U.S. is a trade deficit country, while the EU is a surplus country, and the impact of tariffs will certainly be greater on Europe, so they are eager to negotiate. However, because the EU has 27 member countries, it requires multiple layers of approval, which naturally slows down the progress. He added:

"Some member states are also very dissatisfied with the speed of negotiations, but we can't help it, because the United States is negotiating with the EU headquarters, not separately with each country."

Post-election negotiations in Japan: The United States still prioritizes its own people.

However, Besent traveled to Osaka on 7/20 to attend the international expo and did not discuss a trade protocol with Japan. Regarding the Japanese House of Councillors election, there are concerns that the perceived weakening of the Japanese government may affect its negotiation stance. He emphasized:

"The United States will not change its strategy due to Japan's internal politics; the primary goal remains to negotiate the most favorable terms for the American people."

Trump is considering whether to fire Powell, Treasury Secretary: The President will make the decision himself.

Regarding whether President Trump should dismiss Powell, Besant stated that the information leaked to the outside is incomplete, and the media is not used to a "highly efficient president." However, President Trump will gather opinions from various parties, but ultimately he will make the final decision.

In response, the host pressed: "If Trump really wants to fire Powell, would you advise him not to?" Besant stated that it should be examined whether the Fed has done its job well, and since the Fed oversees monetary policy, regulation, and financial stability, if there are frequent mistakes, the Federal Aviation Administration (FAA) would have been thoroughly reviewed long ago.

Besant further criticized the Fed for having a lot of PhDs, yet not achieving any groundbreaking results.

Trump uses tariffs as a weapon again, sanctioning Russia and related exporting countries.

When discussing the issue between Russia and Ukraine, whether the United States will roll out a new sanctions plan against Russia. Bensent stated that the sanctions operations of the Treasury Department are handled by the Office of Foreign Assets Control ( OFAC ), but there has been a significant breakthrough this time.

He added that the Senate has passed a new sanctions bill, and President Trump has directly stated that "countries buying Russian oil will be subjected to a maximum 100% secondary tariff." He urged European allies not to just verbally support Ukraine but to follow the lead of the United States.

Can a strong economy also lower interest rates? Finance Minister: The AI revolution will bring high growth and low inflation.

Regarding the current emphasis of the Trump administration on the strength of the U.S. economy, it may weaken the rationale for future interest rate cuts. Bessent stated that a strong economy does not mean that interest rates cannot be cut. In the 1990s, the IT revolution brought about non-inflationary growth, and the AI revolution is expected to take effect as early as the beginning of 2026, driving a productivity explosion that allows for high economic growth while maintaining low inflation. At that time, cutting interest rates would be quite reasonable and would also help stimulate the real estate market.

He added that Trump's "Great and Beautiful Act" will drive corporate capital expenditure, and if the policy advances in sync with the AI productivity revolution, the United States has a chance to usher in a golden era of high growth and low inflation.

( U.S. Treasury Secretary Bessent: The selection process for the Fed chair has begun, and the NVIDIA H20 lifting is a bargaining chip in U.S.-China negotiations ).

This article states that U.S. Treasury Secretary Bessent: If negotiations stall on 8/1, a 40% tariff will be imposed, and Powell's future will be decided by President Trump. First appeared in Chain News ABMedia.

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