On May 18, Treasury Secretary Scott Bessent said that the US may implement regional tariffs instead of targeting individual countries.

This comes as the administration adjusts its goal of finalizing 90 trade deals in 90 days, citing complexity.

President Trump recently told Middle Eastern business leaders that tariff rates for specific countries would be set in the next two to three weeks.

On CNN’s State of the Union, Bessent said the US is prioritizing agreements with 18 key trading partners. He mentioned the possibility of regional tariff structures, like standardized rates for Central America or parts of Africa.

On NBC’s Meet the Press, Bessent warned that countries not negotiating in good faith could face the return of higher tariffs. The administration’s shift shows a more pragmatic approach to trade talks.

🔗 Source: Axios

🧠 Food for thought

1️⃣ The pendulum swing of US tariff policy continues a centuries-old pattern

The current administration’s regional tariff approach represents the latest swing in America’s cyclical tariff history, which has oscillated between protection and liberalization.

US tariff policy has historically been divided into three distinct periods: revenue generation (1790-1860), protection (1861-1933), and reciprocity (1934 onwards), with average tariff rates fluctuating dramatically from as high as 60% to as low as 1.61% in recent decades 1.

Before income tax was established in 1913, tariffs constituted nearly 95% of federal government revenue, highlighting their historical fiscal importance beyond trade policy 1.

The shift to regional tariff approaches rather than negotiating with each trading partner individually reflects pragmatic adjustments seen throughout US history when administrative capacity couldn’t match policy ambitions.

The current baseline 10% tariff with country-specific additions draws on elements of both the protectionist “restriction” period and the negotiation-focused “reciprocity” era, demonstrating how administrations often blend historical approaches 2.

2️⃣ Economic evidence warns of inflation and GDP impacts from broad tariffs

Historical precedent suggests the administration’s tariff strategy risks significant economic consequences despite its more pragmatic regional approach.

The Smoot-Hawley Tariff Act of 1930 demonstrates the potential downside of aggressive tariff policies, as it triggered international retaliation that saw US exports plummet from $5.2 billion to $1.7 billion between 1929 and 1933, exacerbating the Great Depression 3.