Treasury Secretary Scott Bessent stated on Sunday that the tariffs proposed by President Donald Trump are unlikely to significantly increase inflation. Bessent’s remarks come just two days before the tariffs are set to take effect on Tuesday. Trump plans to impose a 25% tariff on imports from Mexico and Canada, along with an additional 10% duty on Chinese imports, which adds to the 10% tariff levied on February 4.
Some economists have expressed concerns that these tariffs could lead to inflation and keep interest rates elevated until 2026. During an interview on CBS’s “Face the Nation,” Bessent was asked about the potential impact of the tariffs on the average household. He responded that while the outcome remains uncertain, he is not worried about China’s reaction. According to Bessent, China will absorb the tariffs as their business model relies on exporting to manage inflation.
China’s Ministry of Commerce has firmly opposed Trump’s latest tariff increase and has pledged to retaliate as necessary. Following the initial round of U.S. tariffs in February, China increased duties on certain U.S. energy imports and added two U.S. companies to an unreliable entities list. Experts believe China might adopt similar measures again in response to the new tariffs. A Ministry of Commerce spokesperson previously told CNBC that if the U.S. continues its current approach, China will take all necessary countermeasures to protect its rights.
Bessent also commented on Mexico’s proposal to match U.S. tariffs on China to avoid being affected by Trump’s tariffs, urging Canada to consider a similar move. “The Mexican leadership has offered to do that,” Bessent said. “We haven’t heard from the Canadians, but I think that would be a very good start.” He suggested that announcements from these countries might come on Tuesday, or the tariff implementation could proceed, with further developments to follow.
— news from CNBC