Treasury Secretary Scott Bessent has dismissed worries about a Wall Street Trump tariff selloff after the White House declared a trade war on Canada, China, and Mexico that has spooked investors.
Bessent told Fox & Friends that the commander-in-chief’s top priority is living the living standards of ordinary Americans despite market concerns over his move to slap tariffs of between 20% and 25% tariffs on three of this country’s main trading partners.
“Over the medium term, which is what we’re focused on, it’s a focus on Main Street. Wall Street’s done great, Wall Street can continue to do fine, but we have a focus on small business and consumers,” the former hedge fund mogul said. “So we are going to rebalance the economy.”
Bessent’s comments came just hours after the levies went into effect, which saw the tech-led Nasdaq index fall by nearly 2% in morning trading, down 10% from its near-record high on Dec. 16.
He dismissed warnings from the Federal Reserve that they will simply push inflation higher over the long term, pointing to automaker Honda’s decision to shift production from Mexico to Indiana to dodge the tariffs.
“With the China tariffs, I am highly confident that the Chinese manufacturers will eat the tariffs — prices won’t go up,” Bessent said. “With Canada and Mexico, I think we’re in the middle of a transition.”
Trade between the United States and the three nations is worth an estimated $2.2 trillion. But Trump accuses them of failing to do enough to stop the flow of the deadly fentanyl into this country.
A report by the free market think-tank The Peterson Institute for International Economics warned last month that the tariffs could cost each American household an average of $1,200.
China responded immediately with punishment measures of their own, announcing they would hit certain US imports with levies of 10%-15% from March. 10.
Bessent, the 62-year-old founder of the Key Square Group investment firm, also singled out the falling costs of repaying home loans as one of Trump’s major victories since he returned to the White House six weeks ago.
“One of the biggest wins for the American people, since election day and since inauguration, mortgage rates have come down dramatically,” he said. “The bottom 50% of Americans over the past two years have gotten crushed by these high interest rates.”
On Thursday, 30-year mortgage rates sank to the lowest level in two months, reaching an average rate of 6.76% in Freddie Mac’s weekly mortgage market survey from the previous week’s level of 6.85%.
They hit a 10-year high during the Biden-Harris administration, peaking at 7.79% on Thursday, Oct. 26, 2023.
