"Do not retaliate," U.S. Treasury Secretary Scott Bessent advised all countries after President Donald Trump announced sweeping tariffs on most countries.

"Sit back, take it in, let's see how it goes," Bessent told Fox News. "Because if you retaliate, there will be escalation. If you don't retaliate, this is the high-water mark."

Apart from the baseline 10% tariff on most imports, Trump unveiled tariff rates of 34% on China (in addition to the existing 20% levy) and 32% on Taiwan. Tariff rates declared on U.S. allies - 25% on South Korea, 24% on Japan, and 20% on the European Union.

U.S. top trading partners Canada and Mexico were excluded from the 10% baseline tariff. The existing tariffs of up to 25% on imports not compliant with the USMCA deal remain in place.

While Ukraine is on the tariff list, Russia and Belarus are not. Bessent said this is because the U.S. doesn't trade with these sanctioned countries. But government data showed that U.S. total goods trade with Russia was an estimated $3.5B in 2024.

As for the recent stock market selloff, Bessent said it was caused by a sharp pullback in the biggest tech stocks, and not Trump's policies that are "setting the stage for long-term economic growth."

"If you go back and look, the stock market actually peaked on the [DeepSeek] Chinese AI announcement," Bessent said. "So a lot of what we have seen has been just an idiosyncratic tech selloff."

World leaders respond 

China and the EU have already vowed countermeasures to safeguard their interests. 

Japanese trade minister Yoji Muto said the steep 24% tariff requires a "careful, yet bold and speedy approach," adding that the government would consider all possible responses, including potential retaliatory measures. 

South Korea's acting President Han Duck-soo said the government must "pour all its capabilities to overcome the trade crisis." He also ordered emergency support measures for South Korean businesses.

Canadian Prime Minister Mark Carney said while Trump "preserved a number of important elements" of the Canada-U.S. commercial relationship, the fentanyl tariffs and steel and aluminum levies still remain. "We are going to fight these tariffs with countermeasures."

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