Scott Bessent, President Donald Trump’s Treasury Secretary, firmly supported the application of tariffs at The New York Times‘ DealBook Summit, during a discussion with Andrew Ross Sorkin, emphatically stating his conviction that tariffs are not a tax. He shifted the focus of the discussion by Questioning Democrats who assert tariffs contribute to inflation, urging them instead to “join me and cut taxes, and that will be disinflationary.”
TL;DR
- Scott Bessent argues tariffs are not a tax and urges Democrats to cut taxes for disinflation.
- He claims many Democrats secretly support tariffs but avoid public endorsement due to labeling.
- Bessent believes tariffs help rebalance trade and bring back domestic production, despite revenue concerns.
- He asserts tariffs are a singular cost modification, not a generalized price increase contributing to inflation.
Bessent argued behind the scenes, a “huge number” of Democrats are actually in favor of tariffs but can’t say so because they’ve been labeled “the Trump tariffs,” forcing them to avoid deviating “from the hive.” And he insisted he has gotten a “a couple of Democrats” to walk into his “bear trap” with their argument tariffs act as a tax. By their own logic, Bessent insisted, if they truly believe taxes are inflationary and therefore bad, they should do the obvious: “So you believe taxes are inflationary. So join me and cut taxes, and that will be disinflationary.”
While Bessent and Sorkin debated, the Treasury Secretary grappled with the significant (non-AI) economic challenge of 2025. U.S. Businesses and shoppers bear the cost of tariffs, and they are difficult to distinguish from a tax. These tariffs seem to have revived inflationary pressures that were diminishing when Trump secured reelection, and they are connected to a larger trade tangle with China that began almost ten years ago. Nevertheless, the Trump administration has maintained its dedication to these tariffs, despite their outcomes diverging significantly from When Trump unveiled global “reciprocal tariffs” in April.
A ‘diminishing ice cube,’ yet it remains significant
The tariffs are currently bringing in a lot of revenue and are “good for labor,” he argued. At the same time, Bessent emphasized the revenue generation is secondary, describing tariffs as a “shrinking ice cube,” acknowledging the mounting estimates from various economists that the revenue being generated is less than the White House initially projected. The ultimate goal is to rebalance trade and to bring back domestic production.
Bessent also discussed worries that tariffs are contributing to inflation, explaining inflation as a “generalized price and persistent price increase,” while tariffs might appear to raise prices in 2025, they are actually a singular cost modification. Sorkin questioned Bessent, bringing up the conclusion from Bank of America that tariffs have driven up consumer costs, and Federal Reserve Chair Jerome Powell’s comment that “inflation away from tariffs is actually not so far from our 2% goal.”
Bessent pushed back against the “tariff piece is a small part of the economy” and disregarded a significant portion of Sorkin’s inquiries, asserting that it's caught in a “fever swamp of Democratic talking points.” The Treasury Secretary stated that a primary element of the administration’s approach involves confronting China, which Bessent characterized as a “very different economic animal” because of its readiness to “subsidize labor, subsidize production, subsidize capital” in order to preserve its export-driven economy. Bessent contended that tariffs offer essential emergency influence, pointing out that when Trump warned China of a 100% tariff over export licensing stipulations, China “immediately came to the negotiating table.”
Anticipating the Supreme Court's decision on tariffs, Bessent conveyed a hopeful outlook, while also acknowledging “everyone says it will be a loss for the administration.” He cautioned that if the government is unsuccessful in the legal challenge, it “will be a loss for the American people” and indicated that even if the existing tariffs are invalidated, the government possesses methods to preserve the framework.
Bessent additionally countered common media understandings of Justice Amy Coney Barrett's comments during the proceeding. When Barrett declared that reversing the tariffs “will be a mess,” Bessent contended that her actual intention was for the court to be “very judicious” and “very prudent.”
