S& 500 rise on U.S.-Japan trade deal optimism; Tesla, Alphabet earnings due
Investing.com -- Treasury Secretary Scott Bessent said Wednesday that U.S. talks with the European Union "are going better than they had been," while noting that Japan secured a lower 15% auto tariff rate by proposing an innovative financing package.
In a Bloomberg TV interview, Bessent explained that Japan’s reduced tariff rate came after the country offered a creative solution involving "partnership, equity, and credit guarantees" as part of its foreign direct investment pledge, which he described as "all new capital."
When asked if the EU could secure a similar 15% tariff rate instead of the proposed 25%, Bessent emphasized that Japan’s rate was specifically tied to its innovative approach, suggesting the EU would need to propose something comparable.
Bessent characterized the EU’s preparation of retaliatory measures as a negotiating tactic, adding "I would do the same if I were in EU place."
Regarding China, the Treasury Secretary said the U.S. is "in a good place" and can "move on to bigger talks," noting it’s "not sustainable" for China to make up 30% of global manufacturing. He stressed the U.S. doesn’t want decoupling from China but rather "supply de-risking."
On Federal Reserve matters, Bessent said there are "a lot of strong Fed candidates including on the board" and at regional banks, though he wouldn’t discuss specific names or the nomination process for the next chair. He added that the administration is "not in a rush" on Fed chair nomination and confirmed his regular meetings with current Chair Jerome Powell continue.
Bessent also criticized the Fed’s analysis of tariffs as "a bit off" and suggested the central bank should conduct an internal review of its policies, possibly using an outside panel similar to what the Bank of England has done in the past.