USTR Greer on Face the Nation: US Can Restore 'Busan Deal' Tariff Levels on China; Investment and Trade Boards Signal Post-Summit Architecture

US Trade Representative Jamieson Greer appeared on CBS Face the Nation on Sunday May 17, 2026 — two days after the 'meagre' Trump-Xi Beijing summit concluded — providing the first comprehensive public statement on the post-summit US trade policy posture. **Key statements from the transcript:** **On the new US-China Trade/Investment Boards:** - Greer stated: 'We have never had a Board of Trade or a Board of Investment before, we've always had an ad hoc approach.' He positioned the formalization of these discussion mechanisms as a genuine upgrade in bilateral trade architecture. - The 'Board of Trade' mechanism — first announced at the summit as a framework for managing ~$30B in bilateral tariff reductions from each side — is now being framed as the primary structural outcome of the Trump-Xi summit. **On the 'Busan Deal' Tariff Threat:** - Greer explicitly warned that: 'The Chinese know...that the United States can elevate tariffs to the higher level that we had at the time of what we call the Busan deal in October.' - The 'Busan deal' references the Trump-Xi bilateral framework agreed in October 2025, setting a tariff baseline that was subsequently reduced by approximately **10 percentage points** after the Supreme Court's February 20, 2026 ruling striking down IEEPA tariff authority. - The implication: if China does not engage constructively with the new trade boards, the US has the legal basis (through Section 301 or Congressional action) to restore those ~10 percentage points on the China tariff rate. - Current effective rate on China: ~31.6%. Pre-SCOTUS ruling level: ~41.6%. Greer is explicitly threatening escalation back to ~41.6% as a negotiating lever. **On the summit overall:** - Greer signaled continued optimism about the post-summit framework while acknowledging the process nature of the deliverables: bilateral boards are months-long projects, not immediate tariff reductions. **Recession Risk Significance:** Greer's Face the Nation interview provides important clarity on the post-summit trade policy trajectory: the US is using the Board of Trade mechanism as a goodwill gesture while keeping tariff escalation ('Busan Deal' restoration) as a credible threat. This means the effective China tariff rate (~31.6%) is unlikely to decline materially in the near term — and could rise to ~41.6% if diplomatic momentum stalls. For the stagflation outlook: sustained tariffs at 31–41% on China maintain pipeline inflation pressure through goods prices, complementing the Iran war energy shock. Neither the Fed nor importers can plan around this uncertainty, keeping business investment subdued.