Trump Tariffs: China Trade Deal Likely Be Extended, Bessent Predicts
The Trump administration's trade deal with China that sharply lowered the tariff rate on Chinese imports is expected to be extended past its Aug. 12 deadline, Treasury Secretary Scott Bessent predicted Tuesday, though he maintained higher tariff rates on other countries' imports are still slated to take effect Aug. 1 as scheduled.
Copyright 2025 The Associated Press. All rights reserved
Key Facts
Bessent will hold trade discussions in Stockholm, Sweden, next Monday and Tuesday with his Chinese counterparts, the Treasury Secretary told Fox Business on Tuesday, during which the two countries will 'be working out what is likely an extension' to the current deadline.
The Trump administration and Chinese government announced a 90-day trade deal in May, which lowered the tariff rate on most Chinese imports into the U.S. from a combined 145% down to 30%.
Bessent said he thinks trade is 'in a very good place with China' but suggested the Trump administration still has more it wants Beijing to agree to, such as China pulling back on its manufacturing and building more of a 'consumer economy,' as well as ending its practice of buying sanctioned Russian oil.
While it remains to be seen what tariff rate on Chinese goods could become permanent, Bessent suggested the Trump administration will likely keep the 30% rate, saying it was able to move on to other issues in its negotiations with China 'now that trade has kind of settled in at a good level.'
The Treasury Secretary was less flexible when it came to projecting what will happen on Aug. 1, when the tariff pause on every other country's tariffs expires, calling it a 'pretty hard deadline' for 'all countries.'
What Will Happen With Tariffs On Aug. 1?
The Trump administration has so far only sent out letters to only some countries that impose new tariff rates, scheduled to take effect on Aug. 1, and reached full negotiated trade deals with even fewer. Countries that have received new tariff rates include major trading partners like the European Union (30% tariff rate), Mexico (30%) Japan (25%), South Korea (25%) and Brazil (50%). While he suggested the administration still intends to impose more new tariff rates in the coming days, Bessent said Tuesday he expects that any countries that haven't had a new rate imposed by Aug. 1 will just 'boomerang' back to the tariff rates that President Donald Trump first imposed during his April 'Liberation Day' announcement. Those tariffs range between 10% and 50% depending on the country. The Treasury Secretary also suggested that even if new tariff rates take effect on Aug. 1 as scheduled, the administration will still continue its trade negotiations with other countries. The deadline 'doesn't mean we can't negotiate when the countries are at the higher level,' Bessent told Bartiromo, claiming the president's high tariff rates are a 'pretty ingenious strategy' by Trump to inspire other countries to reach trade deals faster.
What We Don't Know
If the tariffs will actually take effect as scheduled. Trump has already extended the deadline on his tariff pause once before, from July 9, and has come under scrutiny in the past for backing off the worst of his tariff plans as they've caused the stock market to drop—earning him the Wall Street nickname 'TACO Trump,' for 'Trump always chickens out.'
Tangent
Bessent also expressed confidence in Federal Reserve chair Jerome Powell in his Tuesday interview with Fox, amid speculation that the Fed chair could either resign or be ousted by Trump—which the president has so far denied he'll do. 'I know Chair Powell. There's nothing that tells me that he should step down right now. He's been a good public servant,' Bessent told Bartiromo. 'His term ends in May. If he wants to see that through, I think he should. If he wants to leave early, I think he should.'
Key Background
Trump has made tariffs the centerpiece of his economic policy, rolling out tariffs on nearly all countries in April despite longstanding concerns from economists that doing so would raise prices for consumers and harm the economy. The president's sweeping 'Liberation Day' tariffs initially briefly took effect on April 9, but the worst of the tariffs were swiftly paused, with Trump putting only a baseline 10% rate in place for 90 days after the markets plunged. While the Trump administration vowed to use the pause to negotiate trade deals—promising '90 deals in 90 days'—the government has so far only announced deals with a few countries, prompting Trump to start just sending out letters imposing new tariff rates before announcing the deadline was extended. Trump initially imposed the harshest tariffs on China, which he previously had a trade war with during his first term. The president levied a combined 145% tariff rate on the country during the 90-day pause, even as other nations had their rates dropped down to 10%, before the two governments were able to broker a deal in May.
Further Reading
Forbes
Trump 'TACO' Tracker: Here Are The President's 28 Tariff Flip-Flops
Forbes
US And China Agree To Roll Back Most Tariffs For 90 Days As Negotiations Continue
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
20 minutes ago
- Yahoo
Trump Plans To Force Thousands Of USDA Workers To Leave D.C. Area
The Trump administration plans to push thousands of U.S. Agriculture Department workers out of the Washington, D.C., region by forcing them to relocate to far-away offices if they want to keep their jobs. Agriculture Secretary Brooke Rollins announced the plan in a press release Thursday, with her office claiming the move would 'better align' the agency 'with its founding mission of supporting American farming, ranching, and forestry.' Rollins said the department employs around 4,600 workers in the D.C. area, but by the time the transition is over, it plans to have 'no more than 2,000' left in and around the nation's capital. It also expects to close most of its buildings in the area, including a major research center. The D.C.-area employees would be transferred to 'hub' locations in Raleigh, North Carolina; Kansas City, Missouri; Indianapolis, Indiana; Fort Collins, Colorado and Salt Lake City, Utah, the agency said. Rollins acknowledged the move would create 'personal disruption for you and your families,' in a video directed at agency employees. 'This decision was not entered into lightly,' she said. Everett Kelley, president of the American Federation of Government Employees, a union representing USDA workers, told HuffPost in a statement that the move would damage the agency. He noted that, despite common misperceptions, 85% of federal employees already live outside the Washington, D.C., region. 'But D.C. is the center of our nation's government for a reason, as it facilitates needed coordination between senior leadership and field offices and ensures agencies are at the seat of the table when decisions are made at the White House and in Congress,' Kelley said. He singled out the announced closure of the Beltsville Agricultural Research Center in Maryland as particularly misguided, calling it a 'crown jewel' for critical research. 'I'm concerned this reorganization is just the latest attempt to eliminate USDA workers and minimize their critical work,' Kelley added. The relocation proposal is reminiscent of a similar, controversial plan at the USDA from the first Trump presidency. In 2019, then-Secretary of Agriculture Sonny Perdue announced that two agencies within the USDA would be relocated to Kansas City to save money and place employees in the Heartland. The move crushed morale and prompted many workers to leave rather than upend their families' lives; it also fueled a successful union organizing campaign among USDA staff. Mick Mulvaney, who had served as Trump's budget director, later boasted about how many resignations the plan had spurred. HuffPost reported earlier this year on how that move was still dogging the agency and its mission more than five years later. A USDA economist said the relocation plan appeared to be little more than a mass layoff in disguise. 'We had a lot of people who had spent their careers working on very specific fields — very niche questions,' the economist said. 'And when they left, it was so sudden and abrupt that there wasn't time to bring in the next generation. You had to just leave all of your work and go.' Rollins argued that pushing workers to other states would benefit the agency's work. 'President Trump was elected to make real change in Washington, and we are doing just that by moving our key services outside the beltway and into great American cities across the country,' she said. The proposal aligns with Trump's broader attacks on the federal workforce. Since taking power in January, the administration has gone to great lengths to push federal employees out of the government, either by firing them through legally dubious means, enticing them to leave through early retirement offers or making them so miserable that they decide to quit. More than 15,000 USDA employees took the administration's 'deferred resignation' proposal earlier this year, raising concerns about how it would continue to enforce food safety, administer agricultural programs and conduct critical research. In fact, so many chose to leave that USDA leadership had to encourage some to change their minds. Related... USDA Cuts More Than $1 Billion Earmarked For Local Food In School Lunches More Than 5,000 Fired USDA Employees Just Got Their Jobs Back Trump Has A Plan To Sabotage The Government — And It Worked Perfectly His First Term
Yahoo
20 minutes ago
- Yahoo
Unusual Volume in Las Vegas Sands Call Options - Investors Bullish on Macao Gambling
There has been a huge, unusual volume in long-dated call options for Las Vegas Sands Corp. (LVS) today after its Q2 results release yesterday. It showed investors are bullish on the Macao gambling scene. LVS stock is up over +4.0% today at $50.67 per share after the earnings release. A huge volume of in-the-money (ITM) LVS call options for expiration on Jan. 16, 2026. More News from Barchart NVDA Broken Wing Butterfly Trade Targets A Profit Zone Between 150 and 160 Tariff Deals Spark Unusual Options Trading in Carrier Global Corp Stock Low IV Alert: Stocks that Could be Ready to Pop Markets move fast. Keep up by reading our FREE midday Barchart Brief newsletter for exclusive charts, analysis, and headlines. That is a very strong signal that the investors who bought these calls expiring in 176 days (almost 6 months from now), expect to see LVS stock much higher. In effect, it works out to a cheaper way to buy into the stock. This can be seen in today's Barchart Unusual Stock Options Activity Report. It shows that over 45,000 call option contracts have traded at the $45.00 call option exercise price, even though the stock price is over $50.00. That means the trades were bought 'in-the-money' by the call option buyers. The midpoint price for these calls is just over $8.00 (i.e., $7.95 bid, $8.15 ask, or $8.05 midpoint). So, instead of paying $50.67 per 100 shares, an investor buying these calls only has to shell out $8.05. But the breakeven price, after paying the exercise price (on or before Jan. 16, 2026), is less than 5% over today's price: $45.00 +8.05 = $53.05 $53.05 / $50.67 = 1.047 -1 = +4.69% premium over the trading price The investor has almost 6 months for LVS to rise over $53.05, the intrinsic value of these long-dated calls. That seems very likely to occur, based on its results today. Let's look at that. Strong Gambling Activity Results in China Despite the company's name, Las Vegas Sands makes all of its money in Macao, China, gambling and resorts (as well as one in Singapore). So, this stock is a play on the Chinese gambling scene. The Chinese are gambling a lot, and Las Vegas Sands is making good money, based on its Q2 results. For example, LVS reported that revenue at $3.175 billion in Q2 rose by over +15.2% from last year's $2.76 billion. Moreover, its operating income skyrocketed +32.5% from $591 million last year to $783 million. In addition, its 'Consolidated adjusted property EBITDA' (i.e., earnings before interest, taxes, depreciation, and amortization) was up +24.3% to $1.33 billion. So far, the company has not released its cash flow statement, so there is no indication yet of its free cash flow. Nevertheless, its operating income margin was 24.66% compared to 21.4% last year in Q2. Given that its capex was $286 million, we can estimate that its free cash flow was about $500 million (i.e., $781m-$286m) before any net working capital flows. That works out to a FCF margin of 15.74% (i.e., $500m/$3,175m revenue) for the quarter. This is a strong FCF result, and implies LVS could be worth substantially more. Price Target for LVS Sands Stock (LVS) For example, based on analysts' estimates over the next two years, revenue could range between $12.13 billion in 2025 and $12.65 billion next year (i.e., $12.39 billion on average). So, using a 15% FCF margin (slightly lower than in Q2), we can estimate $1.86 billion in FCF over the next 12 months (NTM): $12.39b x 0.15 = $1.86 billion FCF That is significantly higher than my estimate of $1.237 billion FCF it made over the last 12 months (ending Q2). Moreover, using a 3.6% FCF yield (i.e., the same as multiplying by 27.8x), Las Vegas Sands stock could be worth over $51 billion $1.86b x 27.8 = $51.7 billion market value Just to be conservative, let's call it $50 billion. That is still 45.3% over today's market cap of $34.4 billion. In other words, LVS stock is worth +45% more than its price today of $50.67, or $73.62 per share Why ITM Call Buying Works Here So, you can see why an investor in these in-the-money (ITM) call options likes LVS stock. For example, let's say that the stock rises to $73.62. The estimated return (ER) is as follows: Intrinsic value = $73.62 - $45.00 exercise price = $28.62 ER = $28.62 / $8.05 price paid for ITM calls = 3.57 -1 = +257% Expected Return And remember that is just for a slightly less than this 6-month period. Moreover, given that all calls have extrinsic value, it's likely that the call options will trade higher than the $28.62 intrinsic value price (at least up until several weeks or days before expiration, assuming it's in-the-money by this amount). The bottom line is that investors in the calls expect to make a very good expected return. However, keep in mind that buying calls entails a large amount of risk, especially if they are not hedged. You can lose 100% of your investment. But, at least the calls have good intrinsic value as they are in-the-money. For example, let' say that the stock stays at $50.67 over the next 6 months. The investor would only lose: $8.05 - ($50.67-$45.00) = $8.05 - $5.67 = -$2.38 potential loss at expiration. $2.38/$8.05 = -29.6% Expected Value (EV) Return So, let's use an advantage player (AP) mentality with this situation. For example, let's assume that there is a 30% probability that the investor can make a 257% return, and a 70% probability that a loss of 29.6% could occur: 0.30 x 2.57 = +77.1% , plus 0.70 x -0.296 = -20.7% = Expected Value Rtn: +56.4% In other words, the investor doing this trade has a better than +56% expected value (EV) return. This assumes that there is a 70% likelihood that the in-the-money call option purchase fails. That is a very good expected return. So, you can see why there is so much volume in today's Las Vegas Sands in-the-money calls expiring on Jan. 16, 2026. On the date of publication, Mark R. Hake, CFA did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Sign in to access your portfolio
Yahoo
20 minutes ago
- Yahoo
US mulls limited authorizations for oil firms in Venezuela, sources say
By Marianna Parraga, Matt Spetalnick and Timothy Gardner HOUSTON/WASHINGTON (Reuters) -U.S. President Donald Trump's administration is preparing to grant new authorizations to key partners of Venezuela's state-run oil company PDVSA, starting with Chevron, which would allow them to operate with limitations in the sanctioned OPEC nation, four sources close to the matter said on Thursday. If granted, the authorizations to the U.S. oil major, and possibly also to PDVSA's European partners, would mark a policy shift from a pressure strategy Washington adopted earlier this year on Venezuela's energy industry, which has been under U.S. sanctions since 2019. A senior State Department official said in a statement they could not speak about any specific licenses to PDVSA's partners, but added the U.S. would not allow President Nicolas Maduro's government to profit from the sale of oil. The U.S. might now allow the energy companies to pay oilfield contractors and make necessary imports to secure operational continuity, two of the sources said. "Chevron conducts its business globally in compliance with laws and regulations applicable to its business, as well as the sanctions frameworks provided for by the U.S. government, including in Venezuela," a company spokesperson said. Though Venezuela and the U.S. conducted a prisoner swap this month, relations between the two countries have been tense for years, and the Trump administration has publicly supported opposition leaders who say their candidate won last year's election, not Maduro. Trump in February announced the cancellation of a handful of energy licenses in Venezuela, including Chevron's, and gave until late May to wind down all transactions. The U.S. State Department, which in May blocked a move by special presidential envoy Richard Grenell to extend the licenses, is this time imposing conditions to any authorization modifications, so no cash reaches Maduro's coffers, the two sources added. But Secretary of State Marco Rubio could still decide to ban the move at the last minute or modify the scope of the new authorizations. It was not immediately clear if the terms of the license that could be granted to Chevron would be reproduced for other foreign companies in Venezuela, including Italy's Eni and Spain Repsol, which have been asking the U.S. to allow them to swap fuel supplies for Venezuelan oil. The U.S. Treasury Department's Office of Foreign Assets Control did not immediately respond to a request for comment. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
