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Treasury Secretary Scott Bessent has provided insight into the ongoing trade negotiations and future economic outlook, revealing plans for upcoming announcements of trade deals. Speaking to Fox Business on Tuesday, Bessent emphasized that there is no reason for Federal Reserve Chair Jerome Powell to step down, despite increasing pressure surrounding U.S. tariffs and economic policies.
Bessent praised the impact of tariffs, noting that they are bringing manufacturing back to the U.S. He pointed out that President Trump has mandated that permits for new factories be completed within one month, signaling an acceleration of domestic manufacturing. Bessent also reinforced that August 1 marks a “pretty hard deadline” for all countries in the current trade negotiations, although he clarified that talks would continue even if tariffs are imposed after the deadline.
Trade Negotiations and Tariff Impact
Regarding specific trade developments, Bessent noted that the current deal with China is set to expire on August 12, and he will meet with Chinese counterparts in Stockholm next Monday and Tuesday. He mentioned that trade talks with China could extend to discussions on Russia and Iranian oil.
Bessent also highlighted ongoing concerns regarding India’s stance on Russian oil, and the possibility of “tough talks” with the G-7 nations on Russia. While trade and geopolitical discussions continue to overlap, Bessent made it clear that these talks are separate from efforts to resolve the Russia-Ukraine war.
Economic Forecasts and Tariff Revenue
On the economic front, Bessent projected that GDP growth would surpass 3% by the first quarter of 2026, driven by ongoing economic policies and trade developments. He also forecasted annual tariff revenue to reach approximately $300 billion, which could represent about 1% of GDP. Over a decade, he anticipated $2.8 trillion in tariff revenue, which would significantly impact the U.S. economy. Additionally, Bessent pointed to the June budget surplus as a result of spending cuts.
Trade Deals and Progress
Bessent also shared updates on specific trade agreements. He mentioned that negotiations with Indonesia had resulted in a fifth draft for a trade deal, while talks with Japan were progressing smoothly, indicating positive momentum in the ongoing negotiations.
In summary, Bessent’s comments reinforce a strong stance on tariffs as a tool for reshaping U.S. trade relationships, while also highlighting the broader economic impacts, including substantial tariff revenues. His predictions for GDP growth and the continuation of trade talks suggest that the administration’s trade policy will continue to be a significant focus in the coming months.
