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Scott Bessent told US senators he would use America’s economic might 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 Trump has nominated to be the next US Treasury secretary on Thursday revealed his most detailed plans yet for how the new 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 apply sanctions as part of a whole-of-state approach to address our national security requirements. And most importantly, we must ensure that the US dollar remains the world’s reserve currency,” Bessent he said in a heated three-hour confirmation hearing.
He said the “most important economic issue of the day” is rebuilding tax cuts to individuals and businesses that Trump introduced 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 “economic disaster” for the US, “and as always with financial instability, falling on middle and working class people.”
But Bessent also made tough comments on international economic policy, including pledging to support possible sanctions on Russia’s oil sector in an effort to increase pressure on Moscow over war in Ukraine.
“If President Trump (does) ask, and as part of his strategy to end the war in Ukraine, I will be 100 percent in favor of lifting sanctions, especially on Russian oil companies, to a level that would bring the Russian Federation to the table,” Bessent said.
His comments were pushing up oil priceswhile traders considered the possibility of a reduced global supply of crude oil. International benchmark Brent crude rose more than $1 after Bessent’s comments to more than $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 embraced his agenda, with the heads of the world’s biggest banks — which posted big profits this week — saying optimism about the new administration’s economic plans had unleashed “animal spirits”.
But executives at major banks, speaking this week, also warned that Trump’s threats to impose sweeping tariffs could be inflationary.
Bessent used his lobbying of 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 tariffs to crack down on unfair trade practices, raise revenue for the U.S. government and make deals with other countries.
Bessent also said he would encourage China to buy more U.S. agricultural products, such as corn and soybeans, under the terms of a purchase deal Trump negotiated with Beijing to ease trade tensions during the Republican leader’s first administration. Trump will continue to aggressively apply export controls to American goods going to China, he said.
“We should have a very rigorous vetting process for anything that could be used in artificial intelligence, in quantum computing and surveillance, in 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 on monetary policy.
But he warned that the US Treasury will struggle to use its “borrowing capacity” in times of crisis due to America’s deteriorating fiscal position.
“I am concerned because several times the United States Treasury Department has been called upon to bail out the nation, whether it was the Civil War, the Great Depression, World War II or the recent Covid outbreak,” Bessent said.
He added that “with what we have now, it would be difficult to do the same”.