During an appearance on NBC’s “Meet the Press” on Sunday, Treasury Secretary Scott Bessent insisted President Donald Trump’s economic plan would be a net benefit to the U.S. economy.
Among the positive impacts he offered were reindustrialization, a revitalized private sector and higher wages.
Transcript as follows:
WELKER: It’s great to have you back after a very big week. Let’s start with the market reaction to President Trump’s announcement of his tariffs. As I just laid out at the top of the program, the markets lost more than $6 trillion in value. Was this disruption always part of the plan, Mr. Secretary?
BESSENT: Look, the — Kristen, markets are organic. They’re animals. I mean, you never know what the reaction is going to be. One thing that I can tell you, as the Treasury secretary, what I’ve been very impressed with is the market infrastructure, that we had record volume on Friday and everything is working very smoothly. So, the American people — they can be very — take great comfort in that.
And in terms of the market reaction, look, we get these short-term market reactions from time to time. The market consistently, the — underestimates Donald Trump. I remember that in 2016 the night President Trump won, the market crashed. The market crashed, and it turned out he was going to be the most pro-business president — the — in over a century, maybe in the history of the country, and we went on to very high after inflation returns for the next four years.
WELKER: Well, but this was the biggest two-day crash since the pandemic. And the president on Saturday urging people, quote, “to hang tough,” saying, “It won’t be easy.” And I guess the big question on people’s minds, Mr. Secretary, how difficult is it going to be? And how long are Americans going to have to “hang tough?”
BESSENT: Well, again, I — I reject that — the assumption — there doesn’t have to be a recession, the — who knows how the market is going to react in a day, in a week. What we are looking at is building the long-term economic fundamentals for prosperity that I think the previous administration had put us on the course toward financial calamity.
WELKER: But just in terms of the uncertainty, I think, that people are feeling and seeing, and President Trump saying he wants people to hang tough acknowledging there’s going to be what he has described as a short period of pain. Can you help provide some clarity for folks? How long will this period of uncertainty be here? Are we talking about weeks? Are we talking about months? Are we talking about years?
BESSENT: Again. This is an adjustment process. What we saw with President Reagan, when he brought down the — the great inflation and we got past the Carter malaise that there — there was some choppiness at — at that time, but he held the course, and, you know, we’re going to hold the course.
And this has been years in the building, years in the making, you know, this unsustainable system — our trading partners have taken advantage of us. We can see that through the large surpluses. We can see this through the large budget deficits.
And also, Kristen, this is a national security problem, which we saw during COVID. We saw during COVID that optimal supply chains are not resilient. And what I could say is the only good outcome from COVID is it was a beta test for what would happen if our supply chains got broken, and President Trump has given — has decided that we cannot be at risk like that, for our crucial medicines, for semiconductors — the — for shipping, and we are going to move forward so the American people can know that they are going to have a more secure future.
WELKER: And yet, President Trump promised that he was going to improve the economy starting on day one. He said prices are going to come down. More than 160 million Americans, Mr. Secretary, as you know, are invested in the market. Many of them have spent their lives saving for their retirement. What is your message to Americans who want to retire right now and who’ve just seen their lifetime savings drop significantly?
BESSENT: Kristen, I think that’s a false narrative. Americans who want to retire right now, Americans who have put away for years in their savings accounts, I — I think they don’t look at the day-to-day fluctuations of what’s happening. And you know, in fact, most Americans don’t have everything in the market. Most Americans in a 401(k) have what’s called a 60/40 account. That, you know, 60/40 accounts are down 5 or 6% on the year.
People have a long-term view. They have a program that the reason the stock market is considered a good investment is because it’s a long-term investment. If you look day-to-day, week-to-week, it’s very risky. Over the long term, it’s a good investment.
WELKER: President Trump’s tariffs are being described as the biggest tax hike on Americans in decades. They could cost the average household thousands of dollars. Republican Senator Ted Cruz had this to say. I’m going to play it, get your reaction on the other side.
(BEGIN VIDEO CLIP)
SEN. TED CRUZ (R-TX): Tariffs are attacks on consumers. And I’m not a fan of jacking up taxes on American consumers.
(END VIDEO CLIP)
WELKER: Do you acknowledge that President Trump’s tariffs will cause prices to go up on a range of goods?
BESSENT: Well, Kristen, what I like is data. And if we look at the data from President Trump’s first term, and there’s a big study that just came out from a group of economists, mostly at MIT, that showed that a 20% — 20% tariff on China led to a 0.7% tax or price level increase over four years. I think that’s pretty good if we can take in 20% in tariffs and it’s a 0.7% increase.
And Kristen, the — the little publicized story this week, everyone wants to look at the stock market going down. You know what else went down? Oil prices went down almost 15% in two days which impacts working Americans much more than the stock market does. Interest rates hit their low for the year. So I’m expecting the mortgage applications to pick up.
WELKER: Well, just to be very clear though, I mean, during President Trump’s first term, the cost to Americans was nearly $80 billion in new taxes due to his tariffs. Prices did go up on everything from washing machines to tires.
BESSENT: Well, no, no, no. But let’s go back. The aggregate number was 0.7. So we can discern the individual things. Also households saw real net wages go up. So if wages go up faster than prices, which is not what happened over the past four years, that’s why the bottom 50% got eviscerated.
WELKER: Let — let me ask you about your view. Because last January you wrote that, quote, “Tariffs are inflationary.” The Fed chair said the same thing on Friday that tariffs announced this week caused higher inflation. Have you expressed any concerns to President Trump directly that his tariff policy could be inflationary?
BESSENT: No. What — what I’ve said is, “Tariffs are a one-time price adjustment.” So there — there’s a big difference between insipid, endemic inflation within the system and consistent price level increases and a one-time adjustment. But the other thing that we’re doing is we are raising wages for working Americans. We’re bringing down regulation.
So, you know, there are estimates that regulations have caused the average household about $8,000. That when we get this tax bill through, then we will make the tax levels permanent. And — and again, the drop in the energy prices, the drop in interest costs, now, I — I think real after-tax wages are going to go up for Americans. And that’s what’s important.
WELKER: One of the big questions and points of confusion I think is are these tariffs permanent? Or are they a negotiating tactic? Some administration officials have said they’re permanent. President Trump himself has said he’s open to negotiating. So let me just ask you. Is President Trump willing to negotiate? Or are these tariffs permanent?
BESSENT: Well, I think that’s going to be a decision for President Trump, but I can tell you that, as only he can do at this moment, he’s created maximum leverage for himself, and more than 50 countries have approached — they have approached the administration about lowering their non-territory barriers, lowering their tariffs, stopping currency manipulation, and Kristen, you know, they’ve been bad actors for a long time, and it’s — it’s not the kind of thing you can negotiate away in days or weeks.
WELKER: You yourself have said that he’s using these for negotiating. He has told me directly he’s open to negotiating. So just very clearly for the American people: Can you say definitively, is he planning to negotiate? Has he already started negotiations with countries?
BESSENT: Well, I — I — I think we’re going to have to see what the — what the countries offer, and whether it’s believable, because again —
WELKER: So, he’s open to it, is what I hear you say.
BESSENT: The — no, no, no, it is — I think that we are going to have to see the path forward, because, you know, after 20, 30, 40, 50, years of bad behavior, you can’t just wipe the slate clean.
WELKER: All right. Let me ask you about one of the big questions. Recession, as you know, analysts say the chances of a recession are rising in the wake of the tariffs announced this week. Do you believe that President Trump’s tariffs are risking the chances of a recession?
BESSENT: I — I don’t. And I think we could see from the jobs number on Friday that it was well above expectations that, you know, we are moving forward. So I — I see no reason that we have to price in a recession.
WELKER: OK. Before I let you go, I know you’ve been one of the officials spearheading the efforts to get President Trump’s budget bill passed on Capitol Hill. It includes the president’s plans for tax cuts, extending the 2017 tax cuts, for example. Are you confident that the president’s budget bill will pass before the August recess?
BESSENT: We are shooting for even a much earlier date. And Kristen, I — I can tell you the under-reported story in D.C. is, you know, it’s fun from our side of the aisle to watch the Democratic chaos. But the under-reported story is the Republican unity. And Speaker Johnson has done an incredible job with a small minority. He got reconciliation instructions out on the first try. He got a clean continuing resolution. Speaker Thune, the — the Senate issued the reconciliation instructions. So things are moving very quickly.
WELKER: Very quickly, President Trump called on the Fed chair to lower interest rates. Do you think that Fed Chair Jerome Powell should lower interest rates?
BESSENT: I — I — I think that the — when we see inflation dropping, that the Fed will do what it always does and lower rates. But in the meantime, what we can control is the longer-term rate, the ten-year rate which hit — hit a new low on Friday. That’s where mortgages are priced. That’s where long-term capital formation is priced. And, you know, back to the tax deal, when we can pass that, we will have economic certainty.
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