US Treasury Secretary Bessent defiant on tariffs as he rejects US recession

US Treasury Secretary Scott Bessent on Sunday struck a defiant tone in the face of global financial markets selling off sharply in response to new US tariffs, arguing the duties were necessary and rejecting the idea that they would cause a US recession.

“I see no reason that we have to price in a recession,” Bessent told NBC’s Meet the Press with Kristen Welker.

Bessent — along with Commerce Secretary Howard Lutnick and White House trade czar Peter Navarro in separate comments — gave no indication that President Donald Trump was willing to back down on the sweeping new tariffs he introduced last week. He said more than 50 countries had called the administration seeking negotiations, but any talks are going to take time.

From the US perspective, other countries “have been bad actors for a long time,” Bessent said, adding that the issues could not be negotiated away in a matter of days or weeks.

“We’re going to have to see what the countries offer and if it’s believable,” he said. “I think we are going to have to see the path forward.”

In the two days following Trump’s tariff announcement, markets shed $5.4 trillion in value and dragged down the S&P 500 to the lowest level in 11 months.

Bessent dismissed the market carnage as short-term reactions by “organic animals.”

“We get these short-term market reactions from time to time.” Bessent added. “The market consistently underestimates Donald Trump.”

Former Treasury Secretary Larry Summers said last week’s selloff was the fourth-largest two-day move since World War II, after the 1987 market crash, the 2008 financial crisis and the Covid pandemic.

“A drop of this magnitude signals that there’s likely to be trouble ahead, and people ought to just be very cautious,” Summers, a Harvard University professor and paid contributor to Bloomberg TV, said in a post on X.

Bessent’s comments came the day after an additional 10% duty on all US imports went into effect Saturday. Additional tailored tariffs of up to 50% are due to go into effect on imports from roughly 60 countries on Wednesday.

The announced tariffs will take US import taxes to their highest level in more than a century and have prompted widespread downgrades in growth expectations for the US and global economies. Economists at JPMorgan on Friday said they now expect the US to slip into a recession this year.

Lutnick struck an equally defiant tone, saying there were no plans to delay the sweeping, so-called reciprocal tariffs on Wednesday.

“The tariffs are coming,” Lutnick said on CBS’s Face the Nation, adding that Trump “announced it and he wasn’t kidding.”

“I think the point is you need to reset the power of the United States for America and reset it against all our allies and our enemies alike,” he said.

“This is not a negotiation, this is a national emergency based on a trade deficit that’s gotten out of control because of cheating,” Navarro said on Fox News’s Sunday Morning Futures. “We’re always willing to listen.”

Consumer Prices

Kevin Hassett, head of the White House’s National Economic Council, acknowledged that US consumer prices “might go up some” as a result of Trump’s tariffs, but suggested that concern among economists, the Federal Reserve and some lawmakers was overblown.

Speaking on ABC’s This Week, Hassett said he doesn’t anticipate “a big effect on the consumer in the US” and that Americans will eventually benefit from tax and spending cuts that Trump wants to push through Congress.

Both Bessent and Hassett downplayed concerns that the tariff barrage will stoke inflation, highlighting what appears set to become a growing point of disagreement with the Federal Reserve and Wall Street economists.

During last week’s market meltdown, Trump stoked a confrontation with the Federal Reserve, saying on Truth Social it’s a “PERFECT” time for Fed Chair Jerome Powell to cut interest rates.

In a speech Friday shortly after Trump’s comments, Powell said it’s “becoming clear the tariff increases will be significantly larger than expected,” likely leading to higher inflation and slower growth.

Hassett said “the president’s allowed to have an opinion, but there’s not going to be any political coercion over the Fed for sure.”

He also rejected speculation about Trump’s strategy after the president shared of a link to a video that suggests he’s purposely trying to crash financial markets to goad the Fed into cutting rates.

“He’s not trying to tank the market,” Hassett said. “He’s trying to deliver for American workers.”

Trump, who has spent the weekend fielding phone calls and competing in the club championship at his Florida golf club, has said he wants to reshape the global economy in America’s advantage. He argues that the tariffs will bring a wave of new investments as companies build new factories in  the US, bringing jobs and wealth home to the US. 

The main target of his ire is a US trade deficit in goods that topped $1 trillion last year. He and his supporters argue that removing that will “make America wealthy again” in the long term, even though the two-day loss in US market value at the end of last week was five times the trade deficit in value.