Treasury Secretary Scott Bessent repeatedly denied that tariffs are taxes in an appearance before the Senate Finance Committee Thursday, saying there is no “empirical evidence” that prices are rising because of President Trump’s tariffs.
Mr. Bessent told senators that most retailers will choose not to pass the cost of the tariffs on to their customers, repeatedly citing Amazon and Home Depot as examples of companies that have made public pledges not to raise prices because of tariffs.
The Treasury Secretary accused tariff critics of having “tariff derangement symptom” despite the lack of evidence that costs are rising because of tariffs. “There is no inflation. Tariffs are not being passed on to consumers,” he said.
Sen. Maggie Hassan (D-NH) pointed to a new report released by the Joint Economic Committee’s Democratic staff that shows new parents are paying 24 percent higher prices for key goods for new babies. The report found increases in the total cost of five common baby items – the most popular infant stroller, car seat, crib, high chair, and baby monitor – on Amazon since April 1, the day prior to President Trump’s imposition of widespread tariffs
Asked if the President’s off-and-on tariff policy is creating economic uncertainty for businesses and consumers, Mr. Bessent said the President is engaged in “strategic uncertainty, which is also called negotiation.”
As an example, he said the President’s threat to impose crippling tariffs on European Union products immediately brought Brussels to the negotiating table to work on a trade deal. Until the President made his threat, the EU was slow walking trade talks, he said.
Mr. Bessent said trade talks with 18 major trading partners continue and he expects to see some agreements announced soon.
Sen. Chuck Grassley (R-Iowa) urged the Administration to line up some trade deals quickly, saying that Americans need to see certainty. The previous day, Mr. Bessent suggested that some trade negotiations may continue beyond the July 9 deadline.
But Mr. Trump told reporters Wednesday night that he does not think it will be necessary to provide any extensions. The President said letters are going out in the next week or two to trading partners informing them what tariff rate is being assigned to them.
Separately, Senate Democratic Leader Chuck Schumer (NY) critcized the new trade deal with China, calling it a “feeble truce.”
“After months of Donald Trump trying to talk tough on China, China today has more leverage over the US than when Trump started on this venture. Donald Trump’s trade war has been a colossal failure and chaotic mess, with virtually nothing to show for it.”
On social media Thursday, Mr. Trump posted that “THE CHINA DEAL IS GREAT!”
According to press reports, a spokesperson for China's Ministry of Commerce appeared to downplay Mr. Trump’s assertions that the United States and China have struck a final trade agreement. Speaking at a press conference, the spokesperson characterized the outcome of this week's trade negotiations in London as a “framework” to consolidate what was agreed to at negotiations in Geneva, Switzerland, in May. This week's talks in the U.K. represented the “first meeting,” the spokesperson said.
On rare earths, the spokesperson said China would issue export licenses based on “reasonable needs” and noted that “compliant applications have already been approved.
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