Bessent: If Countries, EU Negotiate in Good Faith, July 9 Tariff Deadline Will Extend

He added, "If someone is not negotiating, then we will not."

He later said that many of the trading partners who account for the bulk of the trade deficit "have come up with good offers."

He also said that in talking to the U.S. trade representative, he learned "we may be able to do a one-size-fits-all regional deal" for smaller countries where the U.S. has less trade.

Bessent had just returned from London before the June 11 hearing, where he was one of three Cabinet members in negotiations with China to try to get rare earth magnet restrictions rolled back. He received a few questions about those negotiations in a five-hour appearance in front of the House Ways and Means Committee.

Rep. Linda Sanchez, D-Calif., complained that tariffs are driving up prices on tools, toys, canned goods and clothing. "All we have to show for the economic pain," she said, are "these flimsy trade deals."

Sanchez, the ranking member on the trade subcommittee, asked Bessent: "Do you think China is a reliable trading partner?"

He replied, "I think we will see."

Sanchez noted that China didn't make the purchases it promised in the phase one deal, and said that its firms continue to produce counterfeits and steal U.S. intellectual property.

She said she was alarmed to see the president saying the "China deal is done," given there have only been four days of talks.

Bessent said what was completed last night "was for a specific goal," and to get a broader agreement, "it will be a much longer process."

He did tell Sanchez that he raised many of the issues she had with the Chinese in London.

Several Republicans asked Bessent about transshipment, though the way they and Bessent talked about it was not customs fraud transshipment, but rather the export of Chinese inputs that are incorporated into goods in another country, and then exported to the U.S.

Rep. Rudy Yakym, R-Ind., asked Bessent what he had meant when he used the term "Fortress North America."

Bessent said, "We think it's important not to have transshipment. Goods cannot move from China to Vietnam to the U.S." He said the greatest opportunity for transshipment is via Mexico or Canada, where the goods can then enter the U.S. duty-free. "Our trade partners are very responsive to this. They have made some very good offers on it," he said.

Rep. Greg Murphy, R-N.C., told Bessent that transshipment undermines Section 301 tariffs, and is getting worse, and asked him if the U.S. brought it up with China in London.

Bessent replied, "As you can imagine, they pushed back on the de minimis exemption, which we have gotten rid of."

He said that all countries will have a different dollar level for de minimis after the administration sets a level.

Bessent received criticism about higher costs due to tariffs from a number of Democrats, and after one such round, he said, "TDS has become tariff derangement syndrome," he said, making a play on words regarding what some call "Trump Derangement Syndrome."

He complained that Democrats say "uncertainty from tariffs, uncertainty from tariffs, but then the same side wants uncertainty on taxes. We will have some certainty on tariffs within some window in the coming quarters."

But it wasn't just Democrats who said tariffs are painful for their local manufacturers, even if Republicans tended to say they or the businesses support the tariff policy in the same breath as bringing up the concerns.

Murphy said talking about tariffs "is a difficult discussion. I'm hearing more and more from manufacturers in North Carolina" that the higher prices they are paying for necessary imported inputs is then "making products uncompetitive when exporting."

Bessent said those companies will be able to improve their cash position with full expensing of new equipment or buildings once the tax bill passes.

He also said, "We are working with industry. Some companies will make less, some will make more."

Rep. Claudia Tenney, R-N.Y., told Bessent that she is hearing from copper fabricators and aluminum fabricators who rely on metals smelted in Canada. "We want to make sure they can be in business," she said, and asked if they can find some relief from metals tariffs.

She asked if Canada could be "back in the mix" as we talk about bringing our supply chains back from China. She did, however, complain about Canada's dairy protectionism.

Bessent agreed it is a balancing act when it comes to punishing Canada for its discriminatory dairy tariffs and looking at the intermingled supply chains.

"I think that the new Canadian government has made very good progress in righting mistakes made by the previous leadership," he said.

Rep. Nicole Malliotakis, R-N.Y., told Bessent she urged the administration not to impose the higher tariffs threatened on Liberation Day. "I think it's really important as we approach the July 9 date there that we take into account that we do have these partners that are working with us," she said. "Let's focus on the most egregious offenders ... ."

Bessent said the top 18 trading partners, including the EU, account for 90% of the trade deficit, and therefore they are the most egregious offenders, but he also told her that partners who are negotiating in good faith may get another reprieve.

She also said, "If we want to build in America ... we need to make sure we have access to parts and supplies from abroad. Let's keep that in mind as well."

Malliotakis told him she's particularly concerned about possible tariffs on pharmaceuticals, given the affordability issue with prescription drugs, and reminded him that you can't just flip a switch to open more domestic capacity.

"Take that into account," she said, advising that the president should "not place tariffs on pharmaceuticals that we desperately need here in the United States."