Treasury Secretary Scott Bessent advised countries to reconsider retaliating after President Donald Trump imposed his “Liberation Day” tariffs on nations worldwide on Wednesday.

Trump is implementing “reciprocal tariffs” on nearly every country, including a 34% tariff on China, a 20% tariff on the European Union, and a 46% tariff on Vietnam, according to the White House.

Bessent told Fox News host Bret Baier on “Special Report” on Wednesday, “My advice to every country right now is do not retaliate.”

“Sit back, take it in. Let’s see how it goes,” Bessent added. “Because if you retaliate, there will be escalation. If you don’t retaliate, this is the high-water mark.”

Following Trump’s announcement on Wednesday, the European Union and China signaled plans to impose retaliatory tariffs on U.S. exports. According to The Washington Post, E.U. ambassadors are scheduled to meet on Thursday to discuss countermeasures. China has also pledged retaliation, though the specifics of those measures remain unclear as of Thursday morning.

“We love soybeans, but we can get them from Brazil; we do not need to get them from the United States,” said a senior European Commission official. “We like Harley-Davidsons, but we also like Moto Guzzi or we can buy Yamaha, right?”

Stocks plunged on Thursday morning following Trump’s announcement of the tariffs. The S&P 500 was on pace for its worst day since September 2022, dropping by 4%, CNBC reported. The Dow Jones also fell 4%, and the Nasdaq Composite dropped 5%.

Trump’s “reciprocal tariffs” seem to be calculated based on the U.S. trade deficit divided by imports, rather than being tied to the tariffs other countries impose on U.S. goods, as initially pointed out by the anonymous X account @orthonormalist.

“While these new tariff measures have been framed as ‘reciprocal’ tariffs, it turns out the policy is actually one of surplus targeting,” Jones Trading Chief Marketing Strategist Mike O’Rourke said, according to CNN. 

“There does not appear to have been any tariffs used in the calculation of the rate. The Trump administration is specifically targeting nations with large trade surpluses with the United States relative to their exports to the United States,” he added.