U.S. Treasury Secretary Scott Bessent on Tariff Reductions

In a recent statement, U.S. Treasury Secretary Scott Bessent suggested that the current U.S. tariffs on trading partners might be reduced once trade imbalances are addressed. Specifically, he mentioned a potential cut in auto tariffs to 15% for Korea and Japan, with an expected implementation in mid-September.

Goals and Conditions for Tariff Reduction

Bessent highlighted the primary goal of the Trump administration's tariff policy as restoring balance to the U.S. current account deficit, which stood at $1.18 trillion in 2024. He compared reciprocal tariffs to "ice cubes that melt away over time," indicating their temporary nature based on improvements in trade deficits. A key condition for reduction includes the return of production bases to the U.S., thereby reducing imports and correcting imbalances.

Focus on China in Trade Negotiations

The U.S. sees China as its biggest economic rival and top military competitor. Recent high-level negotiations in Stockholm led to a tentative agreement on a 90-day reciprocal tariff suspension, pending final approval from President Trump. Bessent emphasized the complexity of predicting the timing for tariff adjustments, noting it varies by country.