US Treasury Secretary: "Content of Trade Deal More Important Than Timing"... Hints at Comprehensive Fed Review

On July 21 (local time), U.S. Treasury Secretary Scott Besant stated that the content of a trade agreement is more important than its timing, indicating that he would not rush to reach a deal ahead of the expiration of the reciprocal tariff suspension measure on August 1. He also strongly pressured the Federal Reserve, arguing that a comprehensive review of the Fed's operations is necessary, as the central bank has refused President Donald Trump's calls for interest rate cuts.

Reuters Yonhap News

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In an interview with CNBC that day, Secretary Besant said, "What matters is the quality of the trade agreement, not the timing," and added, "We are not going to rush to conclude a deal." He emphasized, "I am more interested in achieving a high-quality negotiation than in reaching an agreement by August 1."

Regarding the possibility of extending the tariff suspension, he said, "We have to wait for the President's decision," but added, "If we return to tariffs on August 1, higher tariffs will put greater pressure on other countries to reach a better agreement." This statement is interpreted as leaving open both the possibility of tariffs taking effect next month and the possibility of extending the suspension.

Previously, President Trump, after announcing reciprocal tariffs in early April, suspended country-specific tariffs except for the basic tariff of 10% until the 8th of this month, and then extended the suspension deadline again to August 1. At that time, he sent letters specifying the tariff rates to be applied to South Korea (25%), Japan (25%), and the European Union (EU·30%), stating that the tariffs would take effect next month.

Secretary Besant cited the recent trade agreement with Indonesia, following those with the United Kingdom and Vietnam, as a reason for not being fixated on speed in negotiations. He explained that Indonesia was made to submit five proposals to the U.S., and ultimately, the best agreement was reached. This suggests that, as the U.S. conducts trade negotiations with several countries simultaneously and agreements are not being reached as quickly as initially announced, the U.S. is prioritizing the most advantageous deals over speed.

Secretary Besant also indicated that a follow-up meeting is imminent regarding the two previous rounds of U.S.-China trade talks, saying, "We will have a conversation in the very near future." He explained, "The trade situation is good enough that we can now discuss other issues," and added, "Unfortunately, China is a major buyer of Iranian oil and Russian oil, both of which are under sanctions, so we can begin discussions on this matter."

On July 14, President Trump warned that unless Russia agrees to a ceasefire in the Ukraine war within 50 days, the U.S. would impose a secondary tariff of about 100% on Russian products. While he did not mention specifics, this was interpreted as a signal of high tariffs on countries or companies importing Russian oil.

Secretary Besant stated that, if secondary tariffs are imposed on Russia, he plans to request the EU to join in the sanctions.

He also expressed the need for a comprehensive review of the Fed's overall functions, amid ongoing clashes with President Trump over the issue of interest rate cuts.

Secretary Besant said, "What we need to do is examine the operations of the entire Fed institution and evaluate whether these institutions have succeeded," adding, "Has this institution fulfilled its mission successfully? If it were the Federal Aviation Administration (FAA), wouldn't we look back and ask why so many mistakes happened?"

This can be seen as a statement raising the need for an investigation into the overall operation of the Fed, beyond the recent White House demand for an explanation regarding excessive spending on the Fed headquarters remodeling.

When asked about a Wall Street Journal (WSJ) report that he had persuaded President Trump to prevent the dismissal of Fed Chair Jerome Powell, Secretary Besant avoided a direct answer, saying, "President Trump makes decisions after listening to a variety of opinions," and "Ultimately, the decision is his."

Regarding the Fed's stance of maintaining a freeze on interest rates due to concerns about inflation caused by tariff policies, Secretary Besant argued, "They are stoking fear about tariffs," and "So far, there has been almost no inflation. The price indicators are very good." He strongly criticized the Fed, saying, "They are stuck in a particular mindset," and "I have no idea what those doctors over there are doing."

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