US Treasury Secretary Bessent stated on CNN that if trade deals are not reached, tariffs will rise to a “reciprocal” level. He mentioned that Trump warned foreign countries that failing to negotiate in good faith could lead to tariffs returning to their April 2 levels.
Bessent noted that deals with 18 trading partners are in progress but did not provide specific timing for these agreements. Initially, Trump’s tariffs, which were set for April 9, sparked widespread concern with rates as high as 30%, 40%, and 50%.
Market Response to Tariff Announcements
Following a market downturn, Trump paused the tariffs for 90 days to allow room for negotiations. This pause provided an opportunity for discussions to take place and possibly avert the intended tariff increases.
For those engaging in the derivatives market, the statements from Bessent are not simply rhetoric—they set a timetable, whether directly or not. The mention of a return to April 2 tariffs, with rates between 30% and 50%, outlines a clear bandwidth of possible cost implications for international goods. In Bessent’s words, these will come into play should ongoing negotiations fail, which adds structure to potential future volatility in assets tied to import-heavy sectors.
Given that discussions are reportedly underway with 18 partners, without dates, what we’re reading between the lines is that timelines remain fluid. This lack of concrete scheduling doesn’t mean inaction; instead, it implies that traders should prepare for staggered developments, likely driven by political rather than economic calendars. In the absence of fixed deadlines, we cannot assume synchronised announcements.
Implications for Traders and Market Dynamics
Trump’s earlier decision to suspend tariffs after initial market pressure tells us that responsive, not preventative, policy remains the playbook. We have seen a 90-day buffer granted following sharp reactions in trading behaviour. That window now serves as a marker. Going forward, it would be shortsighted to expect similar forbearance without comparable backlash.
For us, this suggests a need to watch momentum shifts closely, especially in sectors with open hedges on industrial inputs, consumer electronics, and high-volume retail goods. Not anticipating policy reversals, but rather, pricing in the reality that fiscal adjustments will likely accompany media coverage, not precede it. Markets told the story last time. They’ll have to do the same now.
Derivatives linked to international shipping indexes, freight forwarders, and Asia-Pacific exporters are especially exposed. Some might argue for low-delta positioning, but such a stance would ignore the directional cues embedded in this newer round of warnings. There is precedent for following through—at least partially—when diplomatic foot-dragging is flagged in such a public way.
What Bessent did not say may matter more. By choosing not to commit to any date or even a season, he leaves room for unpredictability. That, in turn, presses anyone with daily or weekly exposure to pricing windows to model in wider swings. Position management must adapt. Events are being telegraphed with just enough density that ignoring them would be costly, even if actual rate changes ultimately land in more moderate zones.
Lastly, it’s worth noting that even paused measures have residual effects. Deals in progress suggest negotiation, but not certainty. History here shows that tariffs can be both a punishment and a bargaining chip. We see this as a time for layered risk models. Not only by sector—but across jurisdictions. Certainly not static hedging—momentum correlation now matters far more than baseline assumptions.
