Treasury Secretary Bessent: Trump's 15% Tariff Hike Expected This Week
U.S. Treasury Secretary Scott Bessent has provided the clearest timeline yet for President Donald Trump's planned tariff increase, stating that the move from the current 10% universal levy to 15% will likely be implemented this week. Bessent made these remarks during a Wednesday appearance on CNBC, responding directly to questions about when the administration would follow through on Trump's previous threats.
Five-Month Timeline for Tariff Resolution
Bessent expressed confidence that the current tariff situation would be resolved within a specific timeframe. "It's my strong belief that the tariff rates will be back to their old rate within five months," the Treasury Secretary stated during the interview. He explained that while the process might appear slow-moving, the administration intends to use other legal authorities to resurrect the previous tariff regime that had been invalidated by the Supreme Court.
The Treasury chief noted that the authority for the new duties only allows them to remain in place for 150 days without congressional approval. During this period, administration officials plan to implement more robust tariff mechanisms under Section 301 and Section 232 provisions to replace the emergency law tariffs that were struck down by the high court last month.
Uncertainty About Which Trading Partners Will Be Affected
While Bessent confirmed the timing of the tariff increase, he did not specify which trading partners would be subject to the higher 15% rate. This ambiguity follows recent suggestions from U.S. Trade Representative Jamieson Greer that the increased tariff might not be universally applied. According to sources familiar with the matter, the European Union expects to be exempt from the higher duty due to its existing framework trade agreement with Washington.
The tariff announcement had immediate market effects, with U.S. stock futures erasing gains following Bessent's comments. However, the S&P 500 managed to advance after trading opened in New York, suggesting mixed investor reactions to the news.
Oil Market Stability Amid Geopolitical Tensions
During the same interview, Bessent addressed concerns about oil market stability amid ongoing U.S. and Israeli military actions against Iran. The Treasury Secretary downplayed risks to global oil supplies, emphasizing that markets remain well-supplied despite regional tensions.
"I would encourage everyone to look through the noise and see where we are going on the other side of this in terms of the crude markets—the crude markets are very well supplied," Bessent stated. He highlighted that hundreds of millions of barrels of oil remain available on shipping routes away from the Persian Gulf region.
The Treasury chief pointed to previously announced administration plans to support the oil sector, including:
- Government-provided insurance for oil cargo ships when appropriate
- U.S. Navy protection for safe passage through the Strait of Hormuz
- Additional announcements expected in the coming weeks
China's Vulnerability to Oil Supply Disruptions
Bessent specifically highlighted China's exposure to potential oil supply disruptions from the Persian Gulf, noting that more than 50% of China's energy originates from that region. He revealed that China had been purchasing approximately 95% of Iranian crude oil prior to the current conflict, with those transactions now on hold due to the geopolitical situation.
Potential Trade Actions Against Spain
When questioned about President Trump's Tuesday comments suggesting a potential trade embargo with Spain, Bessent indicated that such an action would involve "a combination effort" across government agencies. The Treasury Secretary did not confirm whether such sanctions would actually be enacted, leaving the possibility open while avoiding specific commitments.
The Trump administration's tariff policies continue to evolve as the president seeks to implement his trade agenda following the Supreme Court's invalidation of his previous tariff regime. Bessent's comments provide the most specific timeline yet for these economic policy changes, while leaving important questions unanswered about their scope and implementation details.
