Lutnick Suggests 10% Tariffs Will Be Available Only to Small Countries
Two of the lead negotiators in the Cabinet -- Commerce Secretary Howard Lutnick and Treasury Secretary Scott Bessent -- avoided directly answering an interviewer's question about whether 15% is the lowest reciprocal tariff rate trading partners like Taiwan, the EU and South Korea can receive.
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Lutnick told Bloomberg TV, "I don't think big countries can get low; small countries can get low." Lutnick has previously floated a 10% tariff for some countries (see 2507210039).
Bessent told Bloomberg TV, "The 15% is the result of this very innovative package the Japanese came with," which is an agreement to invest in projects chosen by the U.S., such as pharmaceutical plants, and, according to the president, give 90% of the profits from those companies to the U.S.
When asked if the EU could get a 15% tariff, Bessent said his counterparts haven't brought anything so innovative to the table, but added, "Talks are going better than they had been. We are making progress with the EU."
The interviewer asked Bessent about the possibility that the EU would impose 30% tariffs on 100-billion-Euros' worth of goods, as they have said they are prepared to do on Aug. 7 if the U.S. imposes 30% tariffs on its exports.
"I think it's a negotiating tactic," he said. "Remember, we are the deficit nation. Any kind of escalation in trade problems will always hit them worse."
On social media, President Donald Trump wrote, "I will always give up Tariff points if I can get major countries to OPEN THEIR MARKETS TO THE USA." Then a few minutes later, he added, "I WILL ONLY LOWER TARIFFS IF A COUNTRY AGREES TO OPEN ITS MARKET. IF NOT, MUCH HIGHER TARIFFS! Japan’s Markets are now OPEN (for first time ever!)."
Lutnick, on TV, said the fact that Japan didn't get a lower rate is because "the Japanese are really never going to open their market like President Trump wants it," so they "bought down" the rate with the investment arrangement.
He said with a 15% tariff on cars, Japanese automakers can still produce some models in Japan and sell them in America.
The interviewer asked both men if the entire auto tariff regime would come down to 15% -- since GM is still paying a 25% rate on cars it manufactures abroad, and Toyota now owes less.
Bessent argued that USMCA-covered parts enter duty-free, and that any proportion of autos assembled in Mexico that was done in the U.S. is also subtracted from the value.
Lutnick said, "We'll see what happens with Europe; we'll see what happens with South Korea."
Bessent also was asked about his previous remarks that the trade truce with China, which expires Aug. 12, is likely to be extended. He said he expects regular 90-day extensions as the two countries negotiate.