Treasury Secretary Scott Bessent
- Said that foreign companies dissatisfied with the tax proposed by the White House, also known as Section 899, should lobby their own governments; called the outrage “disinformation.”
- Presented the planned tax cut bill as pro-investment rather than punitive, and stated that economic growth will not be inflationary.
- Warned that the debt ceiling deadline keeps shifting; urged Congress to act earlier.
- Forecasted a deficit of about 6.5–6.7% of GDP in fiscal year 2025, blaming it on “Biden’s bloated budget.”
- On China: welcomed the continuation of the Geneva talks in London, but stressed that Beijing cannot return to the pre-trade war status quo.
Bessent sought to reassure both lawmakers and markets: the tax bill is meant to stimulate capital investment without causing inflation, deficits will be manageable if growth appears, and investors shouldn’t overreact to daily bond market swings. On trade, Bessent remained firm — China will get tariff relief only if it proves to be trustworthy.
Commerce Secretary Howard Lutnick
- Announced a U.S.-China framework plan to accelerate the approval of American applications related to rare earths.
- Said the current 55% tariffs on Chinese goods will remain; any changes depend on approval from Trump and Xi.
- Stressed that there will be no easing of export controls on advanced AI chips.
- Predicted that the U.S. Steel deal will be finalized “in the near term.”
- Trade agreements with U.S. partners are now expected to be signed on average once a week. However, Lutnick admitted that a deal with Europe is still a long way off.
- Noted that China refused to halt fentanyl production.
Lutnick outlined an optimistic yet cautious scenario: a breakthrough on magnets is realistic, more minor deals are on the way, but the U.S.’s firm stance on tariffs and advanced technology exports remains unchanged. The success of the negotiations now depends on the decisions made by the U.S. partners’ policymakers. The series of new trade deal signings could begin as early as next week.
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Optimism prevails on Wall Street today after a preliminary agreement with China and weaker-than-expected May inflation data. As a result, the U.S. dollar is one of the weakest G10 currencies. The USD index (USDIDX) is down 0.50% today.
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