Bessent hails Japan's financing pitch as EU readies 100 billion euro plan to match Trump's 30% tariff
'They got the 15 per cent rate because they were willing to provide this innovative financing mechanism,' Bessent said in an interview on Bloomberg Television's Surveillance programme on Wednesday (Jul 23), when asked whether other trading partners could get a similar reciprocal levy.
While Japan was previously facing a 25 per cent tariff, its negotiators reached an agreement for a 15 per cent rate, including on imports of automobiles – which are otherwise subject to a 25 per cent product-related duty. The deal also features a US$550 billion fund to make investments into the US.
'They came to us with the idea of a Japan-US partnership, where they are going to provide equity, credit guarantees and funding for major projects in the US,' Bessent said. He also said that the foreign direct investment pledge is 'all new capital'.
The EU plans to quickly hit the US with 30 per cent tariffs on some 100 billion euros (S$150 billion) worth of goods in the event of no deal, and if US President Donald Trump carries through with his threat to impose that rate on most of the bloc's exports after Aug 1.
As a part of a first wave of countermeasures, the EU would combine an already approved list of tariffs on 21 billion euros worth of US goods and a previously proposed list on an additional 72 billion euros of American products into one package, a spokesperson for the European Commission said.
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The US exports, which include industrial goods such as Boeing aircraft, US-made cars and bourbon whisky, would face a levy that matches Trump's 30 per cent threat, according to people familiar with the matter.
The tariffs would be prepared to come into force next month – but only if there is no deal and the US implements its levies after the August deadline, said the people who spoke on condition of anonymity to discuss private deliberations.
Bessent said the EU's plan is 'a negotiating tactic, and it's what I would do if I were in their place.'
Asked whether Brussels had come up with anything innovative in the talks with the US, he said: 'Not yet, but again, talks are going better than they had been.' He added that there has been 'good progress' with the EU, while reiterating his assessment that the bloc has a collective action problem given its 27 member nations. By contrast, Japan – a country Bessent said he had visited 52 times since 1990 – 'moves as one entity'.
Europe's trade surplus with the US also means that 'any kind of escalation in trade problems will always hit them worse'.
The EU's plans come as member states, including Germany, have hardened their positions in response to the US stiffening its negotiating stance.
Berlin would be willing to even support the activation of the EU's anti-coercion instrument (ACI) in a no-deal scenario, a government official said on condition of anonymity. This tool would come into play only if a deal fails to materialise.
The ACI is the bloc's most potent trade tool; a growing number of member states is pushing for its use if a deal is not reached. The instrument is primarily designed as a deterrent and is currently not on the table, with its activation requiring a qualified majority of member states in support of its use.
The ACI would enable the EU to launch a broad range of retaliatory actions, including new taxes on US tech giants, targeted curbs on US investments and limiting access to the EU market.
'We are now approaching the decisive phase in the tariff dispute with the USA,' said German Chancellor Friedrich Merz to reporters in Berlin on Tuesday, after a meeting with his Czech counterpart Petr Fiala. 'Without such an agreement, we risk economic uncertainty at a time when we actually need exactly the opposite.'
Still, the overwhelming preference is to keep negotiations with Washington on track in a bid for an outcome to the impasse ahead of next month's deadline.
Speaking on talks with China, the next round of which looms Jul 28 to 29 in Stockholm, Bessent said: 'We're in a very good place with China now, and we can start moving on to bigger discussions.' He reiterated that those included Beijing's purchases of sanctioned Russian and Iranian oil along with 'a number of security things'. 'We will be talking about purchasing agreements, especially' on agriculture, he added.
With the latest truce on escalatory tariffs with China set to expire Aug 12, Bessent said he thinks 'we could roll it forward, maybe in a 90-day increment'. 'Both sides have de-escalated, and I think we can get into a very good cadence of regular meetings with them.' BLOOMBERG
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