Mon May 19 08:30:00 UTC 2025: **Trump Administration Threatens Tariff Hikes if Trade Deals Stall, Faces Debt Downgrade**

Washington D.C. – The Trump administration is warning trading partners to negotiate “in good faith” within the next 90 days or face a return to higher, “reciprocal” tariff rates. Treasury Secretary Scott Bessent made the announcement on CNN’s “State of the Union” Sunday, emphasizing that the initial April 2 levels, paused to allow for negotiations, would be reinstated if agreements aren’t reached.

Bessent indicated the U.S. is prioritizing deals with 18 “important” trading partners and considering regional agreements. He defended the administration’s tariff policy as “strategic uncertainty,” claiming it’s necessary to secure favorable terms.

President Trump reiterated the urgency for trade deals last Friday, noting that time is running out. His remarks came shortly after markets rallied on news of a temporary de-escalation with China, where both countries agreed to lower tariffs.

However, the administration’s approach is facing criticism. Small businesses are struggling with rising costs and uncertainty due to fluctuating tariffs. Retail giant Walmart has warned of potential price increases, prompting Trump to publicly urge the company to “eat the tariffs.” Bessent stated he spoke with Walmart CEO Doug McMillon, who indicated they will absorb some of the tariff costs, while others will be passed on to consumers.

Adding to the economic pressure, Moody’s Ratings recently downgraded the United States’ debt from AAA to Aa1, citing concerns about the nation’s growing $36 trillion debt amid congressional gridlock. Bessent dismissed the downgrade, but it could lead to higher borrowing costs for the government and potentially impact interest rates for consumers.

The administration’s trade policies and debt management continue to be closely watched as the 90-day negotiation period nears its end.

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