Trump’s Treasury pick Scott Bessent prioritises tax cuts, defends tariff strategy
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The news: Scott Bessent, Donald Trump’s nominee for US Treasury Secretary, testified before the Senate Finance Committee, warning that the US faces a potential “economic calamity” if Trump-era tax cuts are not extended.
Bessent called it “the single most important economic issue of the day,” as he warned that failing to extend tax cuts would lead to a “gigantic middle-class tax increase”.
He defended the Trump administration’s tariff plans, arguing that neither small businesses nor workers would bear higher costs.
He said currency appreciation typically offsets a portion of tariff impacts, using an example where a 10% tariff would traditionally lead to a 4% currency appreciation, reducing the direct burden on domestic stakeholders.
Bloomberg reported Bessent was involved in developing a plan for gradual tariff implementation, with rates potentially increasing by 2–5% per month, although the proposal reportedly had not been finalised or presented to Trump.
Emphasising the strategic nature of tariffs, Bessent linked their use to broader goals, such as strengthening US economic interests and countering international competitors.
Democratic senators, however, argued such tariffs could effectively impose new taxes on working Americans and small businesses, contradicting Bessent’s assurances.
The context: Scott Bessent’s confirmation hearing is one of several this week for Trump’s cabinet nominees.
Today’s hearings include Doug Burgum, a former North Dakota governor and supporter of fossil fuels, nominated for Interior Secretary; Lee Zeldin, a former Republican congressman, nominated to run the Environmental Protection Agency; and Scott Turner, a former NFL player and Republican politician, nominated for Housing Secretary.
Pam Bondi, Florida’s former Attorney-General and a longtime Trump ally, appeared yesterday for her confirmation as Attorney-General.
What they said: Bessent also emphasised the importance of addressing government spending, which he described as “wildly out of control,” and pledged to protect US supply chains, apply stronger sanctions on Russia and uphold the dollar’s global role.
"If we do not renew these tax cuts, we will be facing an economic calamity, and as always with financial instability that falls on the middle and working class people," Bessent said.
"We do not have a revenue problem in the United States of America. We have a spending problem.
The federal government has a significant spending problem, driving deficits that have averaged an historically high 7 per cent of GDP during the past four years,” he said.
“We must work to get our fiscal house in order and adjust federal domestic discretionary spending that has grown by an astonishing 40 per cent over the past four years. Productive investment that grows the economy must be prioritised over wasteful spending that drives inflation."
"We must secure supply chains that are vulnerable to strategic competitors, and we must carefully deploy sanctions as part of a whole-of-government approach to address our national security requirements. And critically, we must ensure that the US dollar remains the world’s reserve currency."
"If any officials in the Russian Federation are watching this confirmation hearing, they should know that if I’m confirmed, and if President Trump requests as part of his strategy to end the Ukraine war, that I will be 100% on board from taking sanctions up, especially on the Russian oil majors to levels that would bring the Russian Federation to the table."
"We should have a very rigorous screening process for anything that could be used in AI, in quantum computing and surveillance, in chips."
The sources: Bloomberg, The New York Times
