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Scott Bessent told US senators he would use America’s economic power against geopolitical foes, while defending Donald Trump’s tariff threats and pushing for tax cuts and looser regulations at home.
The billionaire hedge fund boss, who has been nominated by Trump as the next US Treasury secretary, on Thursday unveiled his more detailed plans for 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 the 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 to people and businesses would cause an “economic disaster” for the US, “and as always with financial instability, falling on middle and working class people.”
But Bessent also made pointed comments on international economic policy, including a pledge to support possible sanctions on Russia’s oil sector in a bid to intensify pressure on Moscow over the war in Ukraine.
“If President Trump requests (it) and as part of his strategy to end the war in Ukraine, I will be 100 percent ready to lift sanctions, particularly on major Russian oil companies, to levels that would bring the Russian Federation to the table,” said Bessent.
His comments lifted oil prices as traders weighed the prospect of a tighter global crude supply. International benchmark Brent crude rose more than $1 after Bessent’s comments to above $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 US adversaries.
U.S. stocks have risen since Trump won the Nov. 5 election as Wall Street has embraced his agenda, with the bosses of the world’s biggest banks — which reported big earnings this week — saying optimism about the administration’s economic plans he had released the “spirits of animals”.
However, executives at major banks, speaking this week, also warned that Trump’s threats to impose sweeping tariffs could be inflationary.
Bessent used his scandal from the Senate Finance Committee — which must approve his nomination before it goes to a full chamber vote — to defend those plans.
While he offered no new details, Bessent said Trump would use the tariffs to address unfair trade practices, raise revenue for the US government and reach deals with other countries.
Bessent also said he would push China to buy more US agricultural products, such as corn and soybeans, under the terms of the purchase agreement Trump negotiated with Beijing to ease trade tensions during the Republican leader’s first administration. Trump will continue to aggressively enforce export controls on American goods going to China, he said.
“We have to have a very rigorous review process for anything that can be used in AI, in quantum computing and surveillance, on chips,” Bessent said.
On the economic outlook, Bessent said he believed inflation would continue to approach the Federal Reserve’s 2 percent target and insisted the Trump administration would respect the central bank’s independence in monetary policy.
But he warned that the US Treasury would struggle to use its “borrowing capacity” in times of crisis because of America’s deteriorating fiscal position.
“I’m concerned because several times the United States Treasury has been called upon to save the nation, whether it’s the Civil War, the Great Depression, World War II, or the recent Covid epidemic,” Bessent said.
He added that “with what we have now, it would be difficult for us to do the same”.
