Special Coverage: Trump's New Global Tariffs Spare No Country
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Instant reaction and analysis from our 3,000 journalists and analysts around the world. I'm Joe Matthew alongside Kaylee Lyons in Washington. Kaylee, we finally have some, if not all, clarity on what's going on.

Indeed, as you mentioned, a 10 percent base rate on all trading partners will be imposed and then other countries will face additional charges, reciprocal charges that include non-tariff barriers in the White House calculation that the White House contends it is being lenient here by charging those countries a reciprocal rate only half.

of what the U.S. has calculated is charged on U.S. imports by those countries. So some examples from the graphics that the White House included in this announcement, China will face a rate of 34 percent, obviously, that is materially higher than the 20 percent tariffs, which already were in effect.

on Chinese products. It'll be a 20 percent rate on the European Union, 24 percent tariffs on Japan. For Vietnam, the reciprocal rate is 46 percent. And of course, Joe, we are seeing markets react in accordance with this news as you are seeing currencies and stocks, at least futures, on the move.

Just coming off that announcement from the president announcing a baseline tariff around the United States, as well as reciprocal tariffs on certain trading partners. I'm joined by Treasury Secretary Scott Besson. Mr. Besson, Mr. Secretary, thank you so much for joining Bloomberg TV. So we're going to have the baseline tariffs come into effect first, then the reciprocal tariffs, a little bit more of a different rate for each individual trading partner.

Are you preparing to negotiate with some of these trading partners before that tariff rate comes into effect on April 9th? Well, I think there have been a lot of discussions, but I think we're just going to have to wait and see what would happen. What I would say, Anne-Marie, is I would advise none of the countries to panic. I wouldn't try to retaliate because...

because as long as you don't retaliate, this is the high end of the number. And I think the market could have certainty that this is the number barring retaliation. So we've got a ceiling.

And then we can see if there's a different floor. So you sound like you're ready for negotiation with a number of these partners. Has the European Union, has China, has India, have these countries reached out? Well, they've all reached out, but it's going to be up to President Trump to see what he wants to do. I think the mindset might be to let things settle for a while.

Their tariffs or non-tariff barriers have been on a long time. So we'll see where it goes from here. When it comes to China, they have a much higher rate on this list. On top of that, there's still that 20 percent fentanyl tariff rate. Is all of this coming together to be more than a 50 percent tariff rate for Beijing? Well, yes, I think it is. And I think it's a combination of things. And, you know, again, that

I think China said today that solving the fentanyl crisis depends on taking off the fentanyl tariffs, and I'm pretty sure that's not the way the sequencing is going to work. They're exporting the precursor chemicals and...

every day, every week, every month, Americans are dying and it's going to have to stop. When it comes to places like China, the president has mentioned he's willing to even look at things like TikTok to potentially do a negotiation with them when it comes to tariffs. I'm sure you're looking at things like the yuan. What's on the table when it comes to this trade realignment between Beijing and Washington? Well, we haven't started anything yet. We've been busy with the

with the tariffs. I've been busy, as we talked about earlier. The tax bill is going very well. So I think that we will move toward the bilateral relationship with China now that we've done the multilateral tariffs. Plans for conversations or a trip to Beijing? Nothing eminent.

When it comes to this negotiation, April 9th, these tariffs come in place. Do you plan on having negotiations before that date? Again, I'm not part of the negotiations. So, you know, we'll see.

I am sure that there are going to be a lot of calls. I just don't know if they're going to be negotiations. The president had this huge chart showing all of the different rates. Canada and Mexico notably missing on that chart. Why is that? I'm not sure. Not sure. Okay, I imagine that has to do potentially because they're already in negotiations previously with the 25%. I'm not sure if you saw the initial market reaction. I haven't.

So, equity futures slid on the news. You had talked about how we're in a detox period. Do you feel that we're still in that period or are you starting to get a little bit concerned? Well, the detox period has nothing to do with the tariffs. The detox period is...

off this incredible level of government spending that we've had, an unsustainable amount of fiscal stimulus. And look, that's got to stop. That's got to stop. So, yeah, can we continue weaning ourselves off of that? And as we see public sector borrowing go down, private sector borrowing go up,

Public sector jobs come down. Private sector jobs go up. Is it going to be perfectly symmetrical? No. But we did see an increase of 10,000 manufacturing jobs last month. So, it doesn't concern you today that during the tariff announcement, equity futures sold off when initially they were rallying when the president only announced a 10 percent tariff base, and then they fell when he announced the higher rates for things like the European Union and China?

And, Maria, I've learned not to look what goes on in after-hours markets. Okay. But since the peaks in February, stocks are down 8%. I think the NASDAQ from its high most recently is down 12%. So far, though...

these kind of—this kind of market downdraft so far this year is not concerning you? Well, look, in my old business, I was very concerned about market movements, and I'm trying to be a secretary of treasury, not a market commentator. What I would point out is that especially the NASDAQ peaked on deep-seek day. So, that's a MAG-7 problem, not a MAGA problem.

Okay, so let's talk about what else you've been spending a lot of your time doing. You have been up on Capitol Hill constantly. You are really working on trying to make sure that this administration can extend the Tax Cuts and Jobs Act. On top of that, more tax cuts. Right now, how are the conversations going in Congress? Well, I actually think the most underreported story in Washington, not by Bloomberg, of course, is the incredible unanimity

unity amongst Republicans. And I think it's President Trump's leadership. But Mike Johnson, with a very narrow margin, issued the reconciliation instructions. And then he also passed a clean, continuing resolution on the Senate side. They are very attentive. And I think they may have something done by this Saturday.

This Saturday. Okay, that's the start of it, though. That's the start. You recently talked about how you think it's not just going to be tax on tips. No tax on tips. That gets added to this bill. You think reconciliation can include a plethora of what the president has talked about. No tax on tips. No tax on Social Security. Also recently talking about rebates if you buy an American car. How did you get all of that?

this done? The deductibility of interest if you buy an American car, which I'm older than you are, but when I bought my first car, the interest was deductible, but now it's got to be only on American cars. So how do you do all this at the same time that

Market participants, budget fiscal hawks, budget hawks in Congress are concerned about the deficit. How are you going to have this big reconciliation package? Well, I think, as we've seen, there's a lot of room to cut spending. So I think, again, where Republicans have incredible unity is on the spending cuts, as we're seeing.

So, when it comes to the timeline of all of this, I do notice that now reconciliation, it seems to be an agreement between the House and the Senate that they're willing to consider about raising the debt ceiling. Mm-hmm.

So, do you plan on getting this bill done before the X date, which the CBO is saying could be the middle of the summer or September? Well, Anne-Marie, I think you just answered the question for yourself, because if debt ceiling is solved via reconciliation, then it has to be done before we hit the X date. And we're going to go on to the warning track sometime in May or June. So, that's when you plan to get this tax bill done?

That's a goal. So if we could put both these stories together today, the president comes out with tariffs. You're working on the tax plan. He talks about tariffs being revenue raisers to offset the tax bill you're working on. At the same time, you and the president also talk about a negotiation you're willing to do to get reciprocity when it comes to other trading partners. How can it be both revenue raising and a negotiation? Well,

To the extent that the tariffs are higher than what we had, it will raise revenues. And, you know, as far as the negotiations, we'll see. And, you know, I could tell you, though, it's not going to be possible to include the tariffs in the CBO scoring. So that will be something running in the background. And as the president said, we've taken in several hundred billion dollars on the China tariffs. But those those don't get scored.

Do you feel that you need to have enough revenue raised from these tariffs before this reconciliation package comes to play in Congress? Well, I don't think we have to have the revenues raised. And look, you know, we're doing two things. Tariffs are going to raise revenues. And then we're also the—

stamping out waste, fraud, and abuse in the government and bringing down the expenses and spending. And we're not going to get credit for either of those with the CBO scoring. So when your audience, when American people see these CBO scores, they could be large, but there is a substantial amount of tariff income. There's a substantial amount of savings.

While all this is happening, consumer sentiment has definitely taken a bit of a dive. Expectations for inflation have gone up. Banks like Goldman are cutting their GDP forecast, saying potentially the Fed is going to have to cut rates, not the good kind of cuts, the kind of cuts because they're nervous about growth.

How concerned are you that the timing of all this is going to be incredibly challenging because of how the American consumer, how corporate America is feeling at this moment? Well, it tells me a couple of things. One, we've got to get the tax bill done quickly, because that's a confidence builder. And two, we're seeing sentiment surveys from the American people, but we haven't actually seen them take action.

the households actually thought that there were going to be, if their real inflation expectations had increased, what would they be doing? They'd be hoarding goods and they would be demanding wage increases. And neither one of those has happened yet. So at the moment, you're not concerned about some of the soft data we're seeing? No, I see nothing. And one of the

great things, many great things about being a treasury is we have lots of business people come through and everything we're seeing in the economy is still very solid.

And executives haven't voiced any of these concerns onto you? No, there's some idiosyncratic things. But in terms of the expectations actually turning into hard data, none of them have seen it yet. Now that you're working on the tax bill, and of course tariffs at the moment are out of the way, what else is on the agenda for you for the rest of the year? Well, we have a Ukraine deal that's coming up.

We've gone to maximum pressure on Iran, so a big part of Treasury is national security. And then we are doing a big push on deregulating in a smart, safe and sound way the regulated financial institutions, which is going to allow for the private sector, not the government sector, to grow.

When it comes to international, where are you with Ukraine and the mineral deal? I believe we may have a team from Ukraine coming over as soon as the end of this week or the beginning of next week. Ukrainians have, I believe that they've hired counsel. And what we did was after the incident in the White House office,

on, I believe it was February 28th, we were going to sign a four-page deal that was parameters of understanding. And at Treasury, we took the opportunity to move forward to the big deal. So this is the exact same deal that would have resulted from the four-page signature deal. So we've just...

fast-forwarded, and we didn't want to lose any time because we believe this deal is so important for the American people, for the Ukrainian people, and for the peace process. So it sounds like in the next two weeks, you're going to have this deal over the finish line.

It's ready on our side. When it comes to Iran, since you mentioned that, and I know you're going to be focused a lot on international aspects, now the tariffs are done and you have the tax deals underway. When it comes to Iran, do you think we could see secondary tariffs, secondary sanctions? Well, we've already seen sanctions. For the first time, U.S. Treasury sanctioned a so-called teapot refinery, which is a private sector refinery in China.

And they are the buyers of the Iranian oil. And we could see more of that. Wow. Interesting. Treasury Secretary Scott Besant, you've been very generous with your time today. We really appreciate it here at Bloomberg TV. Thank you so much. Good to see you. Good to see you.

Adding her voice to the conversation now is Sarah Bianchi, chief strategist of international political affairs at Evercore ISI and former deputy U.S. trade representative under the Biden administration. Sarah, it's always great to have you here on Bloomberg TV and radio. When we consider the kind of levels we are talking about here, at least for some countries, China, for example, with a rate that could be in total at 54 percent tariffs per

on those imports. How immediate of an impact do you expect that to have? And what's it actually going to do to the level of imports the United States is bringing in?

Well, it's certainly a very, very large impact, and not only on China, but so many other countries. Vietnam's rate is very high, Cambodia, the EU. I think where it is, you know, as was mentioned earlier on your show, our early calculations show we're going to get close to 30% weighted tariff average. That's

You know, that's something we've never seen in this country. And they put the minimum, the universal, in place to try to prevent countries from diverting to other places, these goods. So I think everybody's scrambling now. Do you think this is more than a lot what the market's expected? And people are going to try to figure out how to adjust.

Well, I'm trying to figure out what's next here, Sarah. It is great to have you with us as we try to figure out exactly what the president is intending to happen next. Is it more likely that reciprocal tariffs will take effect on April 9th or that we'll have a series of new trade deals with individual countries between now and then?

Well, that's a very, very short amount of time to do a trade deal. And I think perhaps you could see a couple of countries that would be able to pull something in. But what the president was talking about today is very complicated stuff. What types of not just tariffs, uh,

But non-tariff barriers, farming, agriculture exports, how things are docked and ported. Vietnam and Cambodia, they talked extensively about how China is using those countries to bank shop their products. Those aren't things that you can resolve effectively.

very quickly. So I think that we may get a couple of announcements and certainly countries are ready to go and eager to bring their offerings in. But I think the bulk of this, the EU, China, all of these, these are going to take a lot of time to negotiate. I think folks should be prepared to be patient.

Well, and as the president said in his remarks in the Rose Garden, that the way to get an exemption or if you're seeking one, you should terminate your tariffs, calling on countries to drop their tariffs or those other non-tariff barriers. How much easier is that said than done, Sarah, especially for some of these emerging economies that you're referring to that are more heavily reliant on these levies as an actual source of revenue? Their economic structure is just different than ours.

some countries have very, very high tariff barriers, like India. That, in some ways, is complicated to drop back when we're in a WTO world, which I guess we sort of still are. Normally, you would offer that to other countries as well. I honestly think

I honestly think the non-tariff barriers can be more complicated to address. Some of the ones that they're talking about with the EU, overregulation, digital taxes, that stuff that requires legislatures to get involved. The EU, for example, has a lot of different countries with different stakes in various products. So I think it almost is the non-tariff barriers that are more challenging to work through.

You know, of course, the Biden administration kept Trump tariffs in place and even raised some of them, Sarah. With that in mind, I don't know if you think that was the right move or not, but could some of these be permanent? Well, the Biden administration did keep a lot of the Trump tariffs and add to them in China. And that was very, I think the biggest difference in this administration that we're seeing is this is global. This is a lot of allies, the EU, China.

Canada, Mexico, very integrated supply chains. So a very different approach. The way President Trump thinks about it is very different. He wants to know what's in it for us in the United States, even with close allies, which is not really how Mr. Biden would have thought about it. So I think it's very, very different. Certainly,

Certainly, tariffs are easier to put on than they are to take off. And so, for sure, I do think we will see some remnants of this system. A part of that is going to depend on how the economy performs and how much of a stomach President Trump has to, you know, kind of ride that through.

You know, look, if we're at close to 30 percent from 3 percent where we were on the weighted tariff average, we're not going back to three. We might do something, you know, I don't know if it's eight or 10 or what it is, but we're not going back to where we were.

Well, Sarah, I want to go back to something that Mike McKee was referencing, which was the de minimis exemption. I would note, in addition to the executive order that implements these reciprocal tariffs, the president also signed an executive order today eliminating that de minimis exemption. That will be effective on May 2nd. Obviously, this applicable to low value parcels. How consequential is that decision in and of itself?

Well, they've been on a little bit back and forth on this. It's interesting. I wouldn't I would have thought you would need a congressional legislative fix for that. But but but but they're a bit more. We'll see. You know, we'll see how it sticks, you know, because there does seem to be a lot of back and forth in this space.

Certainly certain sectors, it's a really big issue for some of our companies with like low priced clothing that a lot of it comes in under de minimis. So certain sectors very, very impacted if we do see this go into effect. But this one is wobbled around a little bit. So I'm not ready to say like this is for sure a done deal.

Doug Ford, the Ontario premier, is with us now on Bloomberg TV and radio. It's great to have you with us, Mr. Ford. You've called this Termination Day instead of Liberation Day. What will be the response now from Canada?

Well, let's see where these tariffs go. I'm cautiously optimistic that I never saw Canada or Mexico on that list. And it just goes to show you two great countries working together, collaborating together and building relationships. So, again, I'm cautiously optimistic. I think if that's the case, it's the right thing for both the U.S. and Canada.

Well, and considering Canada was not on that list, we understand the existing regime is in place of the tariffs that are in place with the exemption of goods that are USMCA compliant. Does that mean, sir, at least in your mind, that it wouldn't be appropriate for Canada to retaliate for this at this time? That is correct. If that's the case...

then I would highly recommend to the Prime Minister not to retaliate and let's carry on a strong relationship. Let's build the AMCAN fortress, American-Canadian fortress, around both countries and be the wealthiest, most prosperous, safest two countries in the world. You've suggested that Canada would bring down its tariffs.

if the United States did the same. Does this turn into a game of chicken? Do you believe that the White House would respond accordingly?

Well, I hope so. You know, it's we're neighbors for the last 200 years. And when we show good faith or the U.S. shows good faith, you have to follow. This is a partnership that's going to go on for hopefully several hundred more years and decades to come. And we have bigger concerns, both Canada and the U.S., than each other. We have to keep an eye on other countries like China. Who makes the first move in a game like that?

Well, we'll work collaboratively with the administration and with our prime minister. And he'll be speaking to President Trump, I'm sure, over the next day or so. And we'll be working with Secretary Lutnick to get a clear picture of what this means for Canada.

What about what it means for the auto sector in particular? Because, of course, we learned last week that the president would announce what he made final today, which is that 25 percent tariffs on auto imports will be going into place. Obviously, parts are going to be included in that eventually, sir. So what impact do you expect that alone will have, even if tariffs on or reciprocal tariffs were not applied to Canada today?

Well, I just hope there's no tariffs on auto because parts go back and forth across the border seven, eight times before they get assembled either in Ontario or one of the states, be it Michigan or other U.S. states. It's a system that works and has worked since 1965. I've always said you can't unscramble an egg that's been around since 1965. You have to make the omelet larger. And we're just so much stronger together. We buy as many vehicles as we sell down there.

And the ones that we ship to the U.S., 50 percent of that automobile is U.S. parts. So I think the system is working. It's working well for both countries. And it's a great system, especially Canada is buying 400 percent more vehicles off the U.S. than Mexico does, 200 percent more than any other country in the world. We have an incredible relationship with the two great countries.

They're so integrated on many different sectors. But even the people are integrated. You know, millions and millions of Canadians and Americans travel back and forth across the border. They have family members on both sides of the border. And we just appreciate. And Canadians love Americans. I love Americans. I love the U.S. I spent 20 years of my life there. And I have a tremendous amount of respect and friendships with our American counterparts.

Well, it's interesting to hear you say that, Premier Ford. You've been really careful from the commentary that I've heard to direct your remarks at the Trump administration, at the president himself, as opposed to the American people, suggesting that you're looking to reset our trade relationship here on a more positive level, maybe in a post-tariff world. But we've also heard from the prime minister that our trade relationship, as we know it, is over, which is true.

Well, I believe in never getting personal with anyone, no matter if it's President Trump or Secretary Lutnick. We'll talk about the issues.

We may go back and forth. It's no different than family members around the table. You may disagree, but at the end of the day, you come out united and stronger than ever before. Because again, there's a lot of people that don't see eye to eye with the U.S. and Canada, and especially how close we are. We'll need each other for many years to come.

Well, and when we consider the various figures in the Canadian government, you yourself included, obviously there are many people in the Trump administration who have had a hand in shaping these policies. I know you've been in contact with the Commerce Secretary, Howard Lutnick, in particular. Do you believe he had a role in making sure Canada was not included on that list today? Well, I'm really hoping. You know, I have a really very good relationship with Secretary Lutnick.

I have a tremendous amount of respect for him. He's an extremely bright business person, a very shrewd negotiator. That's his job, and I understand that. And our job is to make sure we protect Ontario jobs and Canadian jobs as well. But again, we're so integrated, everything from travel to commerce and everything in between.

When we consider the way forward here, Premier Ford, is it going to be on a national level here or will it be by the provinces? Is this something that you've discussed with the prime minister? It will always be on a national level. The prime minister will lead these negotiations and hopefully we can sit down and either get a USCA deal or renew the USMCA deal. And that would be up to President Trump and better

But our prime minister, I'm the chair of the premiers. It changes every year. And we have a great group of premiers. And the prime minister listens to what we have to say. But if your voice will be included in this conversation, what would an appropriate renegotiation of the USMCA agreement actually look like? What changes would Canada be willing to accept?

Well, I thought the USMCA deal that President Trump put together and said there was the greatest deal ever, I'd love to see that stay the way it is. I want to increase trade and be it the critical minerals that China has cut the US off, be it the high-grade nickel or other critical minerals that the US can't get.

There's no one else in the world I'd want to give them to more than our closest friends and allies. That's the way we should operate, in my opinion. We share the same values. There's no two greater countries, an unprotected border, the longest in the world. That's the way it's been for years, and it's worked. And I'd love to see it continue to work.

Well, so how, I guess, in the end, do you feel, Mr. Ford, about what we heard today from the White House? You could frame this as could have been worse. You could also feel betrayed by some of the comments that President Trump delivered.

How would you describe him? Well, I never, yeah, I never take anything personal, be it from President Trump or anyone else. I understand he's a businessman and that's the way he conducts his business. And fair enough, he has a job to do, we have a job to do. And I think any negotiation, we meet in the middle and make sure that we grow two great countries.

and make them the strongest in the world that no one can touch us. We'll ship down all the critical minerals, we'll ship down all the oil that you need and electricity, anything that you need. We have more natural resources than anyone in the entire world. And again, there's no one I'd want to ship it down to more than our great friends and allies.

Well, finally, as you raise natural resources, we do understand based on an official that briefed reporters that coming later, expected shortly, in fact, or possible soon could be action specifically on lumber as well as as well as critical minerals, which you just mentioned with Section 232 tariffs possible soon. What response would you have prepared if indeed those go into place?

Well, I think we've had this lumber war been going on, it seems, for decades. But majority of the homes built in the U.S. are from Canadian lumber. It would jack up the cost of homes immediately. That's the same as the auto sector. It increased the cost of the American people to buy an automobile. Pharmaceuticals, same thing. Seniors that are relying on low-cost pharmaceuticals, that would go up as well.

These are areas that I believe would be beneficial for both countries to move forward and work together and be very cautious when we look at any tariffs on any of those three sectors. All right, Doug Ford, the Premier of Ontario, thank you so much for joining us with reaction to this announcement we just got from President Trump in the White House Rose Garden.

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