Latest news with #Section301
Leaders
5 hours ago
- Business
- Leaders
Trump Ends Trade Talks with Canada Hours after Sealing China Deal
The US President, Donald Trump, announced that he terminated all trade talks with Canada, after Ottawa imposed a digital services tax on American technology firms. Trump's announcement came hours after the US reached a deal with China to speed up rare-earth supplies' flow into the US, reported Reuters. Surprise Announcement On Friday, Trump said that the US had ended its trade negotiations with Canada over what he called a 'blatant attack' on his country, announcing that he would set a new tariff on Canadian goods within the next seven days. 'We have just been informed that Canada, a very difficult Country to TRADE with, including the fact that they have charged our Farmers as much as 400% Tariffs, for years, on Dairy Products, has just announced that they are putting a Digital Services Tax on our American Technology Companies, which is a direct and blatant attack on our Country,' he said. 'They are obviously copying the European Union, which has done the same thing, and is currently under discussion with us, also,' Trump posed on Truth Social. 'Based on this egregious Tax, we are hereby terminating ALL discussions on Trade with Canada, effective immediately. We will let Canada know the Tariff that they will be paying to do business with the United States of America within the next seven day period,' Trump said. US-Canada Trade Talks The US and Canada have been negotiating over a trade deal for months. Canada is the US' second largest trade partner after Mexico and the largest buyer of US exports. According to US Census Bureau data, Canada imported $349.4 billion of US goods in 2024 and exported $412.7 billion to the US. In February 2025, Trump imposed tariffs on imports from Mexico, Canada and China, over the flow of drugs and undocumented immigrants from those countries to the US, prompting the countries to respond with retaliatory measures. The Canadian Prime Minister, Mark Carney, met with Trump at the G7 summit of world leaders in Alberta in mid-June, where both leaders agreed to pursue negotiations to reach a new economic deal within a month period. Canada Response After Trump's surprise announcement, Carney's office said that the government would resume negotiations with the US to resolve the dispute. 'The Canadian government will continue to engage in these complex negotiations with the United States in the best interests of Canadian workers and businesses,' it said. Further US Actions However, the US President told reporters at the White House that Washington would not resume negotiations with Ottawa 'until they straighten out their act,' adding that the US holds 'such power over Canada.' Furthermore, the US Treasury Secretary, Scott Bessent, downplayed the trade dispute between the US and Canada, during an interview with CNBC. He suggested that that the US Trade Representative, Jamieson Greer, would probably pursue a Section 301 probe into Canada's digital tax, which would pave the way for the US to impose retaliatory tariffs amounting to the approximately $2 billion in losses incurred by American companies. US-China Deal On Friday, Bessent announced that Washington and Beijing had reached a trade agreement that would speed up American firms' access to rare earth minerals from China, according to the Associated Press (AP). He said that the agreement would reduce tariffs and ease the flow of rare-earth magnets to US companies. Two weeks ago, Trump said that Washington and Beijing had finalized a deal, which would grant the US access to the rare-earth metals it needs, while the Chinese college students would be able to attend American universities. The agreement followed talks between American and Chinese officials in London and Geneva. The Chinese Commerce Ministry confirmed the deal on Friday. 'China will, in accordance with the law, review and approve eligible export applications for controlled items. In turn, the United States will lift a series of restrictive measures it had imposed on China,' it said. More Deals Coming Trump has set July 9, 2025 as a date for countries to reach trade deals with the US to avoid facing more tariffs. However, the Trump administration has indicated that this deadline is flexible and could be extended. Earlier on Friday, Bessent said that the Trump administration is engaging in trade talks with 18 top trade partners, including the European Union (EU) and India, adding that new deals could be finalized by the Labor Day holiday on September 1. 'We have 18 important trading partners. … If we can ink 10 or 12 of the important 18, there are another important 20 relationships, then I think we could have trade wrapped up by Labor Day,' he told Fox Business Network. Short link : Post Views: 6
Malaysian Reserve
13 hours ago
- Business
- Malaysian Reserve
Trump ends Canada trade talks in retaliation over digital tax
PRESIDENT Donald Trump said he was ending all trade discussions with Canada in retaliation for the country's digital services tax and threatened to impose a fresh tariff rate within the next week. 'Based on this egregious Tax, we are hereby terminating ALL discussions on Trade with Canada, effective immediately. We will let Canada know the Tariff that they will be paying to do business with the United States of America within the next seven day period,' Trump posted Friday on social media. Treasury Secretary Scott Bessent said on CNBC that he expects the administration will launch a so-called Section 301 investigation into Canada, a tool the US has used against other countries including China, which may lead to higher import taxes. Canada and the US have one of the world's largest bilateral trading relationships, exchanging more than $900 billion of goods and services last year. But the alliance has grown tense since Trump won the election. The president threatened 25% tariffs on imports from Canada and repeatedly said he thinks it should become the 51st US state. Since taking office, he has put taxes on steel, aluminum and automobiles and other goods. In response, many Canadians have boycotted US products and avoided travel to US destinations. Canadian Prime Minister Mark Carney, speaking briefly on his way out of a meeting on Friday, said he hadn't spoken with Trump since his post. 'We'll continue to conduct these complex negotiations in the best interests of Canadians,' he said. The Canadian dollar dropped more than 0.5% almost immediately after Trump's post before reversing those losses. Canada's benchmark equity index fell, ending the day down 0.2%, and the shares of companies that rely on moving goods across the border, including General Motors Co. and apparel maker Canada Goose Holdings Inc., also took a hit. Dozens of countries face a July 9 deadline for Trump's higher tariffs to kick back into place, and have been engaged in negotiations with the US. That deadline doesn't apply to Canada and Mexico. The president imposed tariffs on the US's North American neighbors earlier this year over fentanyl trafficking and migration concerns, and talks with them are being handled on a separate track. Last week, Trump and Carney met at the Group of Seven leaders' summit and agreed to try to hash out an agreement by the middle of July. Business groups and some politicians quickly applied pressure on Carney to drop the digital tax. 'In an effort to get trade negotiations back on track, Canada should put forward an immediate proposal to eliminate the DST in exchange for an elimination of tariffs from the United States,' said Goldy Hyder, chief executive officer of the Business Council of Canada. Ontario Premier Doug Ford reiterated his call for the prime minister to abandon the digital tax. 'We've long supported the idea that global tech giants should pay their fair share in the countries where they operate. But the digital services tax hasn't achieved that,' the Council of Canadian Innovators, which represents technology executives, said in a statement. 'It's functionally a pass-through cost paid by Canadian advertisers and consumers, and it leaves our economy exposed to draconian trade retaliation.' Bessent on Thursday announced a deal with other G-7 countries that will exclude US companies from some taxes imposed by other countries in exchange for removing the Section 899 'revenge tax' from the administration's tax bill. However, the deal didn't address digital services taxes, which are in place in a number of countries but are opposed by Trump and his officials. Canada's digital tax isn't new. It was passed into law a year ago but companies haven't had to pay it yet. The government will proceed with implementing it, with the first payments due Monday, Canada's finance department said earlier Friday, before Trump's post. Business groups had warned it would increase the cost of services and invite retaliation by the US. A group of 21 US lawmakers wrote to Trump earlier this month asking him to push for the tax's removal, estimating it will cost American companies $2 billion. Trump has long railed against taxes and other non-tariff barriers, casting them as an impediment to US exporters. 'We were hoping as a sign of goodwill that the new Carney administration would at least put a brake on that during the trade talks,' Bessent said on CNBC. 'They seem not to have.' The US specifically asked for a 30-day delay in the tax when Trump and Carney met at the G-7, according to Kevin Hassett, Trump's National Economic Council Director, who spoke Friday in an interview with Fox Business. The Canadian digital services tax is similar to those implemented by other countries, including the UK. The levy is 3% of the digital services revenue that a firm makes from Canadian users above C$20 million ($14.6 million) in a year. It would apply to megacap technology companies including Meta Platforms Inc., Alphabet Inc. and Inc. and has been criticized by smaller players including Uber Technologies Inc. and Etsy Inc. 'We are disappointed by the Canadian government's decision to implement a discriminatory tax that will harm Canadian consumers, and we hope that this matter can be quickly resolved,' a spokesperson for Amazon said in an emailed statement. Canadian Finance Minister Francois-Philippe Champagne suggested last week that the digital tax may be renegotiated as part of US-Canada trade discussions. 'Obviously, all of that is something that we're considering as part of broader discussions that you may have,' he said. –BLOOMBERG
The Sun
16 hours ago
- Business
- The Sun
Trump cuts off US trade talks with Canada, shattering optimism over tariff deals
WASHINGTON: U.S. President Donald Trump abruptly cut off trade talks with Canada on Friday over its tax targeting U.S. technology firms, saying that it was a "blatant attack" and that he would set a new tariff rate on Canadian goods within the next week. The move plunges U.S.-Canada relations back into chaos after a period of relative calm that included a cordial G7 meeting in mid-June where Trump and Canadian Prime Minister Mark Carney agreed to wrap up a new economic agreement within 30 days. It also came just hours after U.S. Treasury Secretary Scott Bessent struck an upbeat tone on trade, touting progress had been made with China on reviving the flow of critical minerals for the U.S. manufacturing sector and in other key tariff negotiations. The often-chaotic rollout of Trump's import levies since his return to office this year has frequently whipsawed financial markets, and have begun to weigh on consumer spending, the bedrock of the U.S. economy. U.S. stocks were briefly batted lower by his broadside against Canada, but the S&P 500 and Nasdaq managed to close out the week at record highs. Trump's action comes ahead of Canada's plans to begin collecting on Monday a previously enacted digital services tax on U.S. technology firms, including Amazon, Meta , Alphabet's Google and Apple, among others. The tax is 3% of the digital services revenue a firm takes in from Canadian users above $20 million in a calendar year, and payments will be retroactive to 2022. Trump, in a post on his Truth Social media platform, called the tax "a direct and blatant attack on our country" and said Canada was a "very difficult country to TRADE with." "Based on this egregious Tax, we are hereby terminating ALL discussions on Trade with Canada, effective immediately," Trump said. "We will let Canada know the Tariff that they will be paying to do business with the United States of America within the next seven-day period." Speaking to reporters at the White House, Trump said that the negotiations with Canada would not resume "until they straighten out their act," adding that the U.S. holds "such power over Canada." Canada is the second-largest U.S. trading partner after Mexico, and the largest buyer of U.S exports. It bought $349.4 billion of U.S. goods last year and exported $412.7 billion to the U.S., according to U.S. Census Bureau data. Carney's office responded to Trump's announcement by saying: "The Canadian government will continue to engage in these complex negotiations with the United States in the best interests of Canadian workers and businesses." Bessent sought to downplay the U.S.-Canadian dispute in a CNBC interview, saying U.S. Trade Representative Jamieson Greer would likely open a Section 301 probe into Canada's digital tax that would clear the way for tariff retaliation in the amount of harm to U.S. firms, which he said was roughly $2 billion. The U.S. has prepared similar retaliation against European countries that have imposed digital taxes. A USTR spokesperson did not immediately respond to a request for comment. 'WRAPPED UP BY LABOR DAY' Earlier on Friday, Bessent said the Trump administration's various trade deals with other countries could be done by the Sept. 1 Labor Day holiday, citing talks with 18 top trade partners and another revision to a deal with China to reopen the flow of rare earth minerals and magnets. After a week where tariffs took a back seat to the U.S. strike on Iran's nuclear facilities and the massive tax and spending bill in the U.S. Congress, the Trump administration's trade negotiations have picked up. The United States sent a new proposal to the European Union on Thursday and India sent a delegation to Washington for more talks. "So we have countries approaching us with very good deals," Bessent said on Fox Business Network. "We have 18 important trading partners. ... If we can ink 10 or 12 of the important 18, there are another important 20 relationships, then I think we could have trade wrapped up by Labor Day," Bessent said. He did not mention any changes to a July 9 deadline for countries to reach deals with the United States or see tariffs spike higher, but Trump said at the White House that he could extend the tariff deadline or "make it shorter." Trump said that he would notify countries of their tariff rates within the next week and a half, adding: "I'd like to just send letters out to everybody: Congratulations. You're paying 25%." NEW U.S.-CHINA EXPORT REVISIONS Bessent said the United States and China had resolved issues surrounding shipments of Chinese rare earth minerals and magnets to the U.S., further modifying a deal reached in May in Geneva. As part of its retaliation against new U.S. tariffs, China suspended exports of a wide range of critical minerals and magnets, upending supply chains central to automakers, aerospace manufacturers, semiconductor companies and military contractors around the world. During U.S.-China talks in May in Geneva, Beijing committed to removing the measures imposed since April 2, but those critical materials were not moving as fast as agreed, Bessent said, so the U.S. put countermeasures in place. "I am confident now that ... as agreed, the magnets will flow," Bessent said, adding that these materials would go to U.S. firms that had received them previously on a regular basis. He later said that the U.S. would begin shipping withheld materials to China when the rare earths shipments resumed. China's Commerce Ministry said on Friday the two countries have confirmed details on the framework of implementing the Geneva trade talks consensus. It said China will approve export applications of controlled items in accordance with the law. It did not mention rare earths. Trump administration officials also held trade talks on Friday with India and Japan, two other countries in advanced negotiations with the U.S. The Japanese government said in a statement that the two sides will continue to work to "reach an agreement that benefits both Japan and the United States."
The Sun
16 hours ago
- Business
- The Sun
Trump ends Canada trade talks over tech tax, warns tariffs
WASHINGTON: U.S. President Donald Trump abruptly cut off trade talks with Canada on Friday over its tax targeting U.S. technology firms, saying that it was a "blatant attack" and that he would set a new tariff rate on Canadian goods within the next week. The move plunges U.S.-Canada relations back into chaos after a period of relative calm that included a cordial G7 meeting in mid-June where Trump and Canadian Prime Minister Mark Carney agreed to wrap up a new economic agreement within 30 days. It also came just hours after U.S. Treasury Secretary Scott Bessent struck an upbeat tone on trade, touting progress had been made with China on reviving the flow of critical minerals for the U.S. manufacturing sector and in other key tariff negotiations. The often-chaotic rollout of Trump's import levies since his return to office this year has frequently whipsawed financial markets, and have begun to weigh on consumer spending, the bedrock of the U.S. economy. U.S. stocks were briefly batted lower by his broadside against Canada, but the S&P 500 and Nasdaq managed to close out the week at record highs. Trump's action comes ahead of Canada's plans to begin collecting on Monday a previously enacted digital services tax on U.S. technology firms, including Amazon, Meta , Alphabet's Google and Apple, among others. The tax is 3% of the digital services revenue a firm takes in from Canadian users above $20 million in a calendar year, and payments will be retroactive to 2022. Trump, in a post on his Truth Social media platform, called the tax "a direct and blatant attack on our country" and said Canada was a "very difficult country to TRADE with." "Based on this egregious Tax, we are hereby terminating ALL discussions on Trade with Canada, effective immediately," Trump said. "We will let Canada know the Tariff that they will be paying to do business with the United States of America within the next seven-day period." Speaking to reporters at the White House, Trump said that the negotiations with Canada would not resume "until they straighten out their act," adding that the U.S. holds "such power over Canada." Canada is the second-largest U.S. trading partner after Mexico, and the largest buyer of U.S exports. It bought $349.4 billion of U.S. goods last year and exported $412.7 billion to the U.S., according to U.S. Census Bureau data. Carney's office responded to Trump's announcement by saying: "The Canadian government will continue to engage in these complex negotiations with the United States in the best interests of Canadian workers and businesses." Bessent sought to downplay the U.S.-Canadian dispute in a CNBC interview, saying U.S. Trade Representative Jamieson Greer would likely open a Section 301 probe into Canada's digital tax that would clear the way for tariff retaliation in the amount of harm to U.S. firms, which he said was roughly $2 billion. The U.S. has prepared similar retaliation against European countries that have imposed digital taxes. A USTR spokesperson did not immediately respond to a request for comment. 'WRAPPED UP BY LABOR DAY' Earlier on Friday, Bessent said the Trump administration's various trade deals with other countries could be done by the Sept. 1 Labor Day holiday, citing talks with 18 top trade partners and another revision to a deal with China to reopen the flow of rare earth minerals and magnets. After a week where tariffs took a back seat to the U.S. strike on Iran's nuclear facilities and the massive tax and spending bill in the U.S. Congress, the Trump administration's trade negotiations have picked up. The United States sent a new proposal to the European Union on Thursday and India sent a delegation to Washington for more talks. "So we have countries approaching us with very good deals," Bessent said on Fox Business Network. "We have 18 important trading partners. ... If we can ink 10 or 12 of the important 18, there are another important 20 relationships, then I think we could have trade wrapped up by Labor Day," Bessent said. He did not mention any changes to a July 9 deadline for countries to reach deals with the United States or see tariffs spike higher, but Trump said at the White House that he could extend the tariff deadline or "make it shorter." Trump said that he would notify countries of their tariff rates within the next week and a half, adding: "I'd like to just send letters out to everybody: Congratulations. You're paying 25%." NEW U.S.-CHINA EXPORT REVISIONS Bessent said the United States and China had resolved issues surrounding shipments of Chinese rare earth minerals and magnets to the U.S., further modifying a deal reached in May in Geneva. As part of its retaliation against new U.S. tariffs, China suspended exports of a wide range of critical minerals and magnets, upending supply chains central to automakers, aerospace manufacturers, semiconductor companies and military contractors around the world. During U.S.-China talks in May in Geneva, Beijing committed to removing the measures imposed since April 2, but those critical materials were not moving as fast as agreed, Bessent said, so the U.S. put countermeasures in place. "I am confident now that ... as agreed, the magnets will flow," Bessent said, adding that these materials would go to U.S. firms that had received them previously on a regular basis. He later said that the U.S. would begin shipping withheld materials to China when the rare earths shipments resumed. China's Commerce Ministry said on Friday the two countries have confirmed details on the framework of implementing the Geneva trade talks consensus. It said China will approve export applications of controlled items in accordance with the law. It did not mention rare earths. Trump administration officials also held trade talks on Friday with India and Japan, two other countries in advanced negotiations with the U.S. The Japanese government said in a statement that the two sides will continue to work to "reach an agreement that benefits both Japan and the United States."
CNBC
19 hours ago
- Business
- CNBC
CNBC Transcript: U.S. Treasury Secretary Scott Bessent Speaks with CNBC's Morgan Brennan on 'Closing Bell: Overtime' Today
WHEN: Today, Friday, June 27, 2025 WHERE: CNBC's "Closing Bell: Overtime" Following is the unofficial transcript of a CNBC interview with U.S. Treasury Secretary Scott Bessent on CNBC's "Closing Bell: Overtime" (M-F, 4PM-5PM ET) today, Friday, June 27. Following is a link to video on All references must be sourced to CNBC. MORGAN BRENNAN: Let's turn back to those trade headlines now, President Trump saying the U.S. is "immediately terminating all discussions on trade with Canada," in a surprise announcement, the president citing what he called the egregious digital services tax. Joining us now to discuss is Treasury Secretary Scott Bessent. Mr. Secretary, it's great to have you on "Overtime." Welcome. TREASURY SECRETARY SCOTT BESSENT: Morgan, good afternoon. BRENNAN: Let's start right there. What happened with Canada? TREASURY SECRETARY BESSENT: Well, we knew it was coming. We hoped they wouldn't do it. Canada has this digital services tax. And several other countries do too. We disagree, and we think that they discriminate against U.S. companies. But what Canada did here, as of Monday, they're going to implement a retroactive tax. And we think that -- we don't like the taxes. And, obviously, we think it's patently unfair to do it retroactive. This was something from the Trudeau years. So we were hoping, as a sign of goodwill, that the new Carney administration would at least put a brake on that during the trade talks. They seem not to have. President Trump has responded. And my inclination is that Ambassador Greer over at USTR will be starting a 301 investigation into the digital services taxes to determine the amount of harm to the U.S. companies and the U.S. economy in general. BRENNAN: Why is a Section 301 investigation the way to go? And what could that outcome potentially yield? Would that be broad-based, looking at Canada and the possibility of tariffs, or very targeted on certain industries? TREASURY SECRETARY BESSENT: Well, no, the president can impose tariffs based on IEEPA, which is an emergency economic powers act. The 301 is more durable and could last longer. BRENNAN: So, in terms of 301 being more durable and lasting longer, would this be more broad-based, looking across trade of goods and services with Canada more broadly, or would it be more targeted to certain industries? TREASURY SECRETARY BESSENT: No, it would be targeted across tariffs on Canadian products. And, again, we will have to see. We know the amount. I think it's about $2 billion of retroactive digital taxes, which seem patently unfair. We had been talking to the administration in Ottawa about this, and they decided to go ahead with it. BRENNAN: The European Union is doing something very similar in terms of a digital services tax. How is that factoring into negotiations there? TREASURY SECRETARY BESSENT: Oh, well, no, that's not right. The European Union does not have a digital service tax. Several countries within the European Union have digital service taxes. None of them have done those retroactively. And we're in active discussions with them to take those down, because, again, who has the great Internet companies of the world? It's the United States of America. So it singles out our great American companies. BRENNAN: So, Canada, possible escalation, depending on how this plays out over coming days. De-escalation, though, and that was the news of the morning, with China. What are the details of this China trade agreement? TREASURY SECRETARY BESSENT: Well, it's a continuation of the Geneva agreement, and the centerpiece of it is that we agreed. And it's away from the tariff measures because the tariffs came down immediately after Geneva. Post-Geneva, we had an agreement with the Chinese government to start the flow of rare earth magnets again. They were not as forthcoming as we'd hoped that they would be. So the U.S. implemented non-tariff countermeasures against the Chinese government. We believe that the rare earth magnets are starting to flow again under a licensing agreement that, or a licensing regime that the Chinese government implemented on April 4. And when we are certain that the magnets are flowing again, we will drop our countermeasures. BRENNAN: So, a lot of speculation out there about whether this July 9 deadline for trade deals is a hard line or whether there's some flexibility. Is there flexibility? TREASURY SECRETARY BESSENT: Again, it's going to be up to President Trump. We're going to follow his lead. What I would think is going to happen is, there will be a lot of smaller trading partners. We will just send them letters. There will be a group of deals that we will land before July 9, on or about. And, as Secretary Lutnick said yesterday, he believes there are 10 or 12 of those. And then there are probably another 20 countries where they could go back to the reciprocal tariff of April 2 as we work on the deal, or, if we think that they are negotiating in good faith, then they could stay at the 10 percent baseline. So, there are a lot of moving pieces here. A lot of it is based on the consistency of the negotiations. And, again, it will all be up to President Trump. BRENNAN: Historically, trade deals have taken years sometimes to craft. It's incredible how quickly you're moving here, when you're talking about 10 waiting in the wings and perhaps another 20 behind that here in the next couple of weeks, just to put it in context. TREASURY SECRETARY BESSENT: Yes. BRENNAN: Another thing that seems to be poised to move quickly here, at least in the next couple of days, is, the Republicans have reached a tentative deal regarding the state and local tax deduction, SALT. At least that's what we're hearing. That had been a sticking point. My colleague Emily Wilkins is reporting there are a few other key topics still being worked out, but can this big, beautiful bill make it to the president's desk by July 4? TREASURY SECRETARY BESSENT: I think there's a very good chance. And the only way to get there is for the Senate to start voting this weekend. I think there, I was just with the Senate Republicans, and I think they're going to start voting tomorrow. BRENNAN: Do you see potential roadblocks here over the next week? TREASURY SECRETARY BESSENT: Look, nothing's done until it's done. But President Trump's leadership has gotten us here at what people thought the, would not be a possible date. Leader Thune, Speaker Johnson have done an incredible job of holding small majorities together and getting the bill moving forward. So, I'm optimistic we could have a July 4 signing. BRENNAN: What does the bond market need to understand about this bill, what it's going to mean for government spending and the debt load? TREASURY SECRETARY BESSENT: Well, again, it is the largest cut in discretionary spending in – or non – excuse me – nondiscretionary spending in history. And the other thing too is, what do we care about? We care about growth, we care about spending. So if we can stabilize the spending and up the rate of growth, then that's how we start stabilizing the debt-to-GDP, this terrible situation we had, the deficit-to-GDP, 6.7 percent. We'd never seen anything like this when we weren't at war or in a recession. So this was a peacetime deficit, so we are going to slowly bring that down in a methodical way, and we will stabilize the debt-to-GDP level and start bending the curve down. BRENNAN: Interest rates are still elevated, even as the dollar continues to weaken against other major currencies. Do these market moves concern you? TREASURY SECRETARY BESSENT: Which market moves? BRENNAN: What we're seeing in the dollar as it weakens and the fact that interest rates are still elevated here. TREASURY SECRETARY BESSENT: Well, they – a couple of things there, Morgan, is, I'm not sure why it would concern me that it's natural for currencies to move around. I have traded currencies 35, 40 years. So currencies move up and down. The U.S. still has a strong dollar policy, and we're putting the economic factors in place to continue that. On the other hand, we are seeing for the first time, a real attempt at defense spending in Europe. We're seeing the Germans take off the debt brake. So more fiscal spend would tell you that the euro should appreciate. BRENNAN: If we stick with rates, and particularly here in the U.S., the Fed was slow to respond to spiking inflation a couple of years ago. We know the president's been very vocal in criticizing the Fed chair. Is it the president's concern that the Fed is behind the curve again? TREASURY SECRETARY BESSENT: Well, I – not my words, but the president's, he calls Chair Powell "Too Late Jay," and so he's obviously worried that the Fed's behind the curve again. And, Morgan, I would just point out that studies have shown that people who fall down then tend to look at their feet, which makes them fall down more. And the Federal Reserve fell down on the American people in 2022, let the great inflation get away from them. They should have been hiking sooner, so maybe that's what we're seeing here. BRENNAN: There's a lot of market chatter emerging right now about the possibility of a shadow Fed. How disruptive would the nomination of a new Fed chair this far out from the end of the term of the current one be for the market? TREASURY SECRETARY BESSENT: Well, look, I don't think anyone's necessarily talking about that. There will be two seats opening -- or there will be one seat definitely opening in the beginning of the year, when board member Kugler leaves, and then the chairmanship will open up in May, when Chair Powell leaves. So, Chair Powell doesn't have to leave. He could stay on the board, not as chair. So there is a chance that the person who is going to become the chair could be appointed in January, which would probably mean an October-November nomination. BRENNAN: Your name has been floated in some media reports as a possible replacement for Fed chair come next year. Your response? Is that a job you would consider taking? TREASURY SECRETARY BESSENT: Look, I will do what the president wants, but I think I have the best job in Washington. We're making meaningful change, working on the president's agenda every day. I get to work closely with the president. I think that, as I like to say, we have done peace deals, trade deals, and tax deals. We spent the first 100 days setting the table on those. Now we're going to be landing all those over the next 100 days. So I think that's going to be pretty exciting. BRENNAN: All three of those, we have been talking about this week. Finally, the idea, and I think this is really key -- and it kind of brings us back to the beginning of this conversation with trade and tariffs, but this idea of higher inflation tied to tariffs, case in point, this morning. We haven't really seen it show up in the hard data. The Fed and Wall Street economists think that that's something that's going to materialize this summer. How are you and the administration gaming this out and thinking about this inflation dynamic? TREASURY SECRETARY BESSENT: Well, look, as you said, it hasn't played out, and we're seeing very low numbers. And forget imported inflation, because, if we were to get it from tariffs, which has not happened, it doesn't have to happen, that's a small part of the inflation calculations. What we're seeing is service inflation drop. I think we're going to see the rent component drop and the overall housing component, which is implied owner's rents, drop. So, the Fed's measure of supercore inflation is way down. PCE year over year is down. So, it looks like the trends are quite good. We're at a four-year low in gasoline prices, so we're going to have a great summer travel season. And, Morgan, one thing. I heard you talking with your colleague earlier, where they talked about the April tariff panic. So we found out today this episode from April 3 to today is the fastest bounce-back after a 15 percent decline in S&P history, fastest bounce-back ever. So, we, the administration doesn't look at the stock market every day. What we tried to do was set in place economic fundamentals. And, presumably, the market had a chance to digest the panic and is looking forward. So I think it is telling you that the tariff panic, or, as I like to call it, tariff derangement syndrome, was overdone. We're seeing earnings growth. We're seeing a good path for interest rates. So I think the economy is looking pretty good. BRENNAN: And all of that has led to stocks at record highs today. Secretary Bessent, Scott Bessent, U.S. Treasury Secretary, great to speak with you. We covered a lot there. I do hope you will come back and join me again. Thank you so much. BESSENT: Thank you.
