Bessent says tariffs may return to 'reciprocal' levels if deals aren't made

Bessent says tariffs may return to ‘reciprocal’ levels if deals aren’t made

19.05.2025

Treasury Secretary Scott Bessent warned on Sunday that tariff rates will go back to “reciprocal” levels if countries do not make trade deals with the US during the 90-day pause.

“President Trump has put them on notice that if you do not negotiate in good faith, you will ratchet back up to your April 2 level,” Bessent told CNN, highlighting the 18 key partners with whom the US is prioritizing trade deals.

Downplaying inflation concerns, Bessent said Walmart’s (WMT) price hike warning was a “worst case scenario” after speaking with CEO Doug McMillon. This came after President Trump told the retailer on Saturday to “eat the tariffs” instead of raising prices.

“Walmart should STOP trying to blame Tariffs as the reason for raising prices throughout the chain. Walmart made BILLIONS OF DOLLARS last year, far more than expected. Between Walmart and China they should, as is said, ‘EAT THE TARIFFS,’ and not charge valued customers ANYTHING. I’ll be watching, and so will your customers!!!,” Trump said in a post on Truth Social.

Walmart (WMT) on Thursday said that rising costs from tariffs could lead to higher prices for shoppers as early as this month. The company was the latest to skip giving profit guidance due to Trump’s tariffs disrupting global trade.

Trump said Friday that the US will set tariff rates for its trading partners within the next few weeks. He said his administration cannot negotiate trade deals with all countries at once due to limited capacity.

“I think we’re going to be very fair. But it’s not possible to meet the number of people that want to see us,” the president said during a meeting with business executives in the United Arab Emirates.

Trump, fresh off a trip to the Middle East, also renewed his criticism of Federal Reserve Chairman Jerome Powell on Saturday.

Trump said the Federal Reserve should cut rates “sooner, rather than later,” and continued to express his frustration with Powell

“Too Late Powell, a man legendary for being Too Late, will probably blow it again – But who knows???” Trump added.

Here are the latest updates as the policy reverberates around the world.

LIVE 922 updates

Bessent: US targets 18 partners; tariffs may return to reciprocal rates

Read more here.

EU: Euro-area inflation to fall below 2% on US tariffs

Tariff uncertainty is pushing euro-area inflation below the European Central Bank’s target for next year, the European Commission has warned, citing the impact of US trade measures.

Bloomberg News reports:

Read more here.

EU cuts growth outlook as tariffs fuel uncertainty

The FT reports:

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Tesla may get tariff break in South Africa for EV charging push

South Africa’s President Ramaphosa will discuss business ties with Elon Musk during a Washington visit to improve US relations. A proposal could offer Tesla (TSLA) favourable import tariffs in exchange for building EV charging stations in South Africa.

Reuters reports:

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Cathie Wood: Trump’s tariff war may free up markets

Bloomberg News reports:

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Diageo plans $500M in cost savings by 2028, lowers tariff impact view

Reuters reports:

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China’s factory output resists tariff impact, retail sales disappoint

China’s factory output slowed in April but remained resilient, suggesting government support helped offset the impact of the US trade war threatening its economic growth.

Reuters reports:

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Sun, May 18, 2025 at 5:26 PM UTC

Trump tariff uncertainty still makes earnings estimates and guidance useless

Reflecting on the past week in US markets, Yahoo Finance Executive Editor Brian Sozzi wrote in Sunday’s Morning Brief that amid better-than-feared earnings reports, there was one thing that continued to irk him:

Sun, May 18, 2025 at 3:10 PM UTC

Bessent calls Walmart’s warning of tariff-related price increases a ‘worst-case scenario’

After President Donald Trump on Saturday told Walmart it should “eat the tariffs” rather than raise prices, Treasury Secretary Scott Bessent made the rounds on the Sunday morning talk shows to downplay inflation risks from the administration’s tariffs. Bessent said he spoke to Walmart CEO Doug McMillon on Saturday, the Associated Press reported, adding that the retailer’s warning of looming price increases were just a “worst case scenario.”

Bessent also downplayed the downgrade Friday of U.S. government debt by Moody’s Ratings.

Sat, May 17, 2025 at 4:27 PM UTC

Tariffs are falling more quickly than Wall Street expected

Yahoo Finance’s Josh Schafer writes that the US effective tariff rate has moved lower over the past month amid a stock market rally. At 14.4%, the effective US tariff rate is nearly back to its pre-“Liberation Day” level, as our Chart of the Week shows:

But in markets, the news isn’t just about what’s said. It’s also about how what was said matches investor expectations. On April 2, tariffs negatively surprised as Trump’s announcements were, as we wrote at the time, “worse than expected.”

Well, the latest round of tariff announcements brought up a counter phrase: “Better than feared.”

Sat, May 17, 2025 at 4:16 PM UTC

Trump says Walmart should ‘eat the tariffs’ rather than raise prices

Walmart (WMT) joins rocker Bruce Springsteen and pop music icon Taylor Swift as getting a verbal lashing from President Trump on social media this week.

The president ripped Walmart execs on Saturday for signaling tariff-driven price hikes that are poised to begin later this month.

“Walmart should STOP trying to blame Tariffs as the reason for raising prices throughout the chain. Walmart made BILLIONS OF DOLLARS last year, far more than expected. Between Walmart and China they should, as is said, ‘EAT THE TARIFFS,’ and not charge valued customers ANYTHING. I’ll be watching, and so will your customers!!!,” Trump said in a post on Truth Social.

“We have always worked to keep our prices as low as possible and we won’t stop. We’ll keep prices as low as we can for as long as we can given the reality of small retail margins,” a Walmart spokesperson told Yahoo Finance.

Walmart CEO Doug McMillon was among the CEOs who met with the president in late April to discuss tariff implications. A person familiar with the discussions told Yahoo Finance Walmart made a case to remove tariffs on China altogether as even lower tariffs would have major implications on prices for general merchandise items such as furniture and toys.

Read more here.

Sat, May 17, 2025 at 3:45 PM UTC

Trump pushes Fed for rate cuts, renews criticism of Powell

President Donald Trump on Saturday said in a social media post the U.S. Federal Reserve should cut rates “sooner, rather than later.”

Trump also criticized the head of the central bank, Jerome Powell.

“THE CONSENSUS OF ALMOST EVERYBODY IS THAT, ‘THE FED SHOULD CUT RATES SOONER, RATHER THAN LATER,'” Trump said in the post.

“Too Late Powell, a man legendary for being Too Late, will probably blow it again – But who knows???” Trump added.

Sat, May 17, 2025 at 1:43 PM UTC

Uncertainty over global economy due to tariffs overshadows better-than-feared Q1 results

As the first-quarter earnings season concludes, many companies had better-than-expected results. But Bloomberg reports the overarching uncertainty in the global economy — due in large part to President Donald Trump’s tariffs — continues to drive the narrative, Bloomberg reports:

Fri, May 16, 2025 at 11:57 PM UTC

Trump willing to travel to China to meet with Xi

Bloomberg reports:

Read more here.

Fri, May 16, 2025 at 4:32 PM UTC

Consumer sentiment hits second-lowest reading on record

Yahoo Finance’s Josh Schafer reports:

Read more here.

Fri, May 16, 2025 at 11:08 AM UTC

South Korea minister asks for exemption from US tariffs at Greer meeting

Reuters reports:

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Fri, May 16, 2025 at 10:17 AM UTC

Trump says US will set tariff rates for other nations in weeks

President Donald Trump said on Friday that he’ll decide on tariff rates for US trading partners in the next few weeks.

He said the US can’t handle tariff talks with everyone all at once.

Bloomberg News reports:

Read more here.

Fri, May 16, 2025 at 10:10 AM UTC

Japan to hold out for better trade deal with US

Japan is pushing for full removal of Trump’s 25% car tariffs, signaling it won’t settle for a partial deal. Tokyo aims to avoid domestic backlash by holding out for better terms.

The FT reports:

Read more here.

Fri, May 16, 2025 at 10:00 AM UTC

‘Export rush’ grips China as businesses scramble to make the most of tariff pause

Read more here.

Fri, May 16, 2025 at 9:47 AM UTC

Walmart’s tariff warning spells trouble for US retailers

Walmart’s (WMT) latest tariff warning signals price hikes ahead – and retailers like Best Buy and Mattel could feel the pinch. Yahoo Finance’s senior reporter Brooke DiPalma reports:

Read more here.