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Scott Bessent told US senators that he would deploy America’s economic power against geopolitical foes as he defended Donald Trump’s tariff threats and pushed for tax cuts and looser regulations at home.
The billionaire hedge fund boss, who has been nominated by Trump to be the next US Treasury secretary, on Thursday revealed his most detailed plans on how the incoming administration will seek to reshape the world’s largest economy.
“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,” Bessent said in a heated three-hour confirmation hearing.
He said the “most important economic issue of the day” was the renewal of tax cuts for individuals and businesses introduced by Trump in 2017, which will be the subject of a fierce battle in Congress this year.
Failure to extend the cuts for people and businesses would trigger an “economic calamity” for the US, “and as always with financial instability, that falls on the middle and working class people”.
But Bessent also made pointed comments on international economic policy, including a vow to back possible sanctions on the Russian oil sector in an effort to intensify the pressure on Moscow over the war in Ukraine.
“If president Trump requests [it], and as part of his strategy to end the Ukraine war, I will be 100 per cent on board for taking sanctions up, especially on the Russian oil majors, to levels that would bring the Russian Federation to the table,” Bessent said.
His comments pushed up oil prices, as traders considered the prospect of tighter global crude supply. International oil benchmark Brent rose by more than $1 after Bessent’s comments to over $81 a barrel. The new administration is also expected to target Iranian and Venezuelan oil with tougher sanctions as Trump seeks to increase economic pressure on the US’s adversaries.
US equities have risen since Trump won the November 5 election, while Wall Street has embraced his agenda, with bosses of the world’s biggest banks — which announced bumper profits this week — saying optimism about the new administration’s economic plans had unleashed “animal spirits”.
However, big bank executives, speaking this week, also cautioned that Trump’s threats to impose sweeping tariffs could be inflationary.
Bessent used his grilling by the Senate Finance Committee — which must approve his nomination before it goes to a full vote in the chamber — to defend those plans.
While he did not offer new details, Bessent said Trump would use tariffs to tackle unfair trade practices, raise revenues for the US government and strike deals with other countries.
Bessent also said he would push China to buy more US agricultural products, such as corn and soyabeans, under the terms of the purchasing deal Trump negotiated with Beijing to ease trade tensions during the Republican leader’s first administration. Trump would continue to aggressively apply export controls to US goods going to China, he said.
“We should have a very rigorous screening process for anything that could be used in AI, in quantum computing and surveillance, in chips,” Bessent said.
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On the economic outlook, Bessent said he believed inflation would continue to move closer to the Federal Reserve’s 2 per cent target and insisted that the Trump administration would respect the central bank’s independence on monetary policy.
But he warned that the US Treasury would struggle to use its “borrowing capacity” in times of crises due to America’s deteriorating fiscal position.
“I am concerned because several times the Treasury of the United States has been called upon to save the nation, whether it was the Civil War, the Great Depression, second world war, or the recent Covid epidemic,” Bessent said.
He added that “with what we have now, we would be hard pressed to do the same”.
