Treasury Secretary Scott Bessent staunchly defended President Trump’s tariffs on Thursday, arguing that trade policy should focus less on getting the lowest possible prices and more on putting America first.
“Access to cheap goods is not the essence of the American dream,” Bessent said during a speech to the Economic Club of New York. “The American Dream is rooted in the concept that any citizen can achieve prosperity, upward mobility, and economic security. For too long, the designers of multilateral trade deals have lost sight of this.”
Stiff tariffs implemented earlier this week — and since halted — on Canada and Mexico, and a heightened levy on China, have spooked investors as economists warn the restrictive policies could reheat inflation.
Stocks plunged on Thursday despite promises from the White House to put a 30-day pause on taxes for most Mexican goods, later saying the pause also will include most Canadian goods.
“Wall Street’s done great, Wall Street can continue doing well. But this administration is about Main Street,” Bessent said.
He spoke before news broke that the pause would apply to Canada, as well.
“To the extent that another country’s practices harm our own economy and people, the United States will respond,” Bessent said. “This is the America First Trade Policy.”
Bessent also spoke with Larry Kudlow, Trump’s first-term director of the National Economic Council who hosted the forum, about imposing strict sanctions on Russia to gain leverage for Ukraine.
He said the US will not hesitate to go “all in” on sanctions on Russian energy if it would help clinch a ceasefire deal in the Russia-Ukraine war.
Sanctions on Russia “will be used explicitly and aggressively for immediate maximum impact,” Bessent said.
The US would also increase sanctions on Iran and “shutdown” its oil industry using “pre-determined benchmarks and timelines,” he added.
“Making Iran broke again will mark the beginning of our updated sanctions policy,” he said.
Data released by the Commerce Department earlier on Thursday illustrated the nation’s worsening deficit.
The US trade deficit surged 34% in January from the month before, reaching $131.4 billion as import growth outpaced exports, according to the data.
Many economists attributed the spike in import activity at the start of this year to US companies’ attempt to stockpile products manufactured overseas before the tariffs took effect, according to The Wall Street Journal.
“This system is not sustainable,” Bessent said.
The secretary of the Treasury also dismissed concerns that the taxes would stoke inflation, saying he’s “not worried about” it.
White House officials have argued that Trump’s 2018 and 2019 tariffs didn’t send prices soaring during his first term. Those tariffs primarily targeted steel and aluminum.
During his Tuesday address to the joint session of Congress, Trump said Americans will have to “bear with” him through an “adjustment period.”
Trump’s tariffs will act as a source of revenue to ease the nation’s fiscal deficits and help protect workers from unfair global trade practices, Bessent said.
He also said the taxes are a negotiation tool for Trump as he seeks to pressure neighboring countries to crack down on illegal fentanyl smuggling and migrant border crossings.
Bessent and Ludlow also discussed the government’s overwhelming deficit – which has already hit $840 billion in the first four months of fiscal 2025.
“This is the last chance bar and grill to get this done,” Bessent said, on improving the nation’s debt. “Everyone knows what they should do. It’s, do they have the willpower to do it?”
He also argued that the US should take another look at its bank regulations, and possibly lift some of the rules enforced on smaller banks.
