US Treasury Secretary Scott Bessent said on Wednesday that the US and Canada were likely to end up in a “good place” on trade but warned Washington’s northern neighbour not to launch a political fight in advance of coming talks on the US-Mexico-Canada free trade deal.
In an interview on CNBC, Bessent added that he was disappointed by Europe’s decision to strike a major trade deal with India and defended US President Donald Trump’s decision to raise tariffs on South Korean goods.
As long-standing US trading partners have been buffeted by Trump’s quick policy turnarounds and shifting tariff regime, many have turned to China and each other, increasingly looking at agreements that reduce reliance on Washington.
The administration has grown frustrated that deals cobbled together under extreme duress are not materialising quickly ahead of the November midterm elections.
The EU has not enacted tariff reductions it pledged as part of a framework deal hammered out with Washington in July.
And Trump announced this week he was raising duties on imports from South Korea to 25 per cent from 15 per cent, citing the national parliament’s slow pace in implementing a framework trade agreement that included a pledge to invest US$350 billion in the US.
On Tuesday, the European Union finalised a long-delayed trade deal with India that looks to boost two-way trade as global trade tensions increase.
Bessent, who has emerged in Trump’s first year as the most powerful negotiator and interpreter of the president’s trade policies, said the deal indicated that the EU put trade ahead of the interests of the Ukrainian people.
The treasury secretary argued that Brussels, by failing over the past year to match Washington’s 25 per cent tariffs on Indian products – and driven by its desire for an EU-India trade agreement – had essentially taken the pressure off New Delhi to stop buying sanctioned Russian oil supplies.
Europe, he noted, has continued to buy refined products made in India with sanctioned Russian oil supplies.
“The Europeans were unwilling to join us, and it turns out, because they wanted to do this trade deal,” he said.
“So every time you hear a European talk about the importance of the Ukrainian people, remember that they put trade ahead of the Ukrainian people.”
The administration’s stated concern for the Ukrainian people contrasts with some of its national security moves that have tilted towards Russia more than prior US governments, analysts said.
The EU-India deal is expected to double EU exports to India by 2032 by eliminating or reducing tariffs on 96.6 per cent of traded goods by value, leading to savings of €4 billion (US$4.8 billion) in duties for European companies, the EU said.
Asked whether this deal and others among countries excluding the United States would threaten the US, Bessent said, “They should do what’s best for themselves, but I will tell you, I found, I find the Europeans very disappointing.”
Indian foreign minister Subrahmanyam Jaishankar is set to visit Washington next week for a ministerial meeting on critical minerals.
In recent weeks, a parade of long-standing US allies have travelled or plan to travel to Beijing, presumably keen to hedge their bets at a time when Beijing is seen as a more dependable interlocutor than Washington.
These include Canada, the United Kingdom, India, France, Ireland and Germany.
Analysts said Washington should not be surprised that its actions have spurred reactions.
“With the United States imposing tariffs on its allies and partners and chiding them for voicing concern over its “might makes right” foreign policy, it cannot credibly express disappointment when they work harder to de-risk from Washington and pursue more reliable trade and investment linkages,” said Ali Wyne, senior analyst with the International Crisis Group.
Others said those trekking to Beijing may face many of the same market-access frustration that the US has long faced.
“Our allies are sort of lining up to find alternative markets,” Kelly Ann Shaw, a former trade official during the first Trump administration, said Wednesday. “But I do think that they’re going to run into the same brick wall that we did.”
Bessent last week signalled the possible removal of the 25 per cent additional US tariffs on India following a sharp reduction in Indian imports of Russian oil.
Bessent’s disparaging comments about Europe came amid heightened tensions after Trump threatened to raise tariffs – subsequently dropped – on imports from long-time allies Denmark, France, Germany, Finland, Norway, Sweden, the Netherlands and the UK earlier this month over their opposition to his bid to acquire Greenland.
A Bloomberg study found that Trump has only followed through on one in four of his threats, although the cost in financial market turmoil and delayed corporate planning is often substantial.
Bessent defended Trump’s displeasure with Europe and South Korea, saying it was “helpful to get things moved along”, and that the South Korean parliament needed to ratify the trade deal.
Trump on Tuesday said he expected the United States and South Korea to work out a solution without elaborating. South Korean officials are due to arrive in Washington on Wednesday for talks with trade officials.
Bessent was also asked on CNBC if the US was intervening to strengthen the Japanese yen, to which he said: “Absolutely not.”
Pressed on whether that was something the US planned to do, Bessent said: “We don’t comment other than to say we have a strong dollar policy.”
The remarks boosted the dollar’s value against a basket of currencies on Wednesday, sending it up from a four-year low touched in the prior session.
-- SOUTH CHINA MORNING POST
