Scott Bessent, President Donald Trump’s Treasury Secretary, passionately defended the administration’s implementation of tariffs during a discussion with Andrew Ross Sorkin at the New York Times’ DealBook Summit. Bessent firmly opposed the characterization of tariffs as a tax, countering the argument made by some Democrats who suggest tariffs contribute to inflation. He challenged these lawmakers to collaborate on tax cuts instead, asserting that such a move would help mitigate inflation—an intriguing pivot in the ongoing debate over tariffs and their economic impacts.
Bessent provocatively suggested that many Democrats would privately support tariffs but can’t express this due to their association with Trump’s administration. He noted that they tend to stick to party lines, but he claimed to have successfully engaged a few Democrats in discussions about the economic implications of tariffs. His key argument emphasized that if they believe taxes are inflationary, they should advocate for tax reductions as a means to achieve disinflation.
The conversation turned to the broader economic implications, particularly the complex issue of inflation in 2025. Bessent highlighted that while tariffs do generate revenue, he referred to them as a “shrinking ice cube,” acknowledging that projections for revenue have been less than initially expected. He maintained, however, that the primary objective of the tariffs is to restore balance in trade and stimulate domestic manufacturing.
Addressing concerns that tariffs might exacerbate inflation, Bessent differentiated between generalized price increases and one-time adjustments in prices resulting from the tariffs. He minimized the economic impact of tariffs, characterizing them as a small aspect of the larger economy while criticizing Sorkin’s focus on the inflationary aspects, which he deemed reflective of “Democratic talking points.”
Bessent underscored the importance of tariffs as a strategic tool against China, a nation he described as fundamentally different due to its extensive subsidization of its economy. He pointed out that previous tariff threats had compelled China back to negotiations, illustrating the leverage they can provide.
Looking forward to an impending Supreme Court decision on tariffs, Bessent expressed optimism, despite widespread expectations of a ruling against the administration. He warned that such a ruling would be detrimental not just for the administration but for the American public as well, although he asserted that alternative strategies could be available even if the current tariffs were dismantled.
In a final point of contention with media interpretations, Bessent clarified remarks made by Justice Amy Coney Barrett during the Court’s hearing, asserting that her comments regarding the potential complications of undoing tariffs indicated the need for careful judicial consideration rather than an outright dismissal of their importance. This enduring debate about tariffs encapsulates ongoing tensions in U.S. economic policy and the broader implications for trade relationships, particularly with China.