‘I don't know if President Trump has spoken with President Xi’: Secretary Bessent

Summary

Highlights

• Secretary Bessent dismisses public polling in favor of consumer spending as a more accurate economic measure 📊.
• Strategic uncertainty is used as a negotiation tactic by President Trump in tariff discussions, according to Bessent 🎯.
• Efforts are focused on revitalizing US manufacturing, though it may take time 🔧.
• Despite public denials, negotiations between the US and China are ongoing, according to Bessent 🇺🇸🇨🇳.
• Treasury Secretary emphasizes long-term economic fundamentals over short-term market noise 📈.

Key Takeaways

• Secretary Bessent relies more on consumer behavior than polls for economic insights 📊
• Trump's 'strategic uncertainty' in trade negotiations explained as a leverage tactic 🎯
• Expectation of long-term growth through high-performance manufacturing in the US 🔧
• Acknowledges tension in US-China relations but emphasizes ongoing negotiations 🇺🇸🇨🇳
• Optimism in setting strong economic fundamentals for the future 💪

Overview

Chapters

• 00:00 - 01:00: Introduction and Polling Data The chapter introduces the context with an interview featuring President Trump's Treasury Secretary, Scott Besson. The focus of the discussion is the latest polling data, which indicates that for the first time, more respondents believe the economy has worsened under President Trump's administration. Furthermore, a significant percentage of those polled express concern that the current economic policies might lead to a recession. The Secretary expresses unfamiliarity with the poll results, citing his extensive business background.
• 01:00 - 03:00: Economic Performance and Public Perception The chapter focuses on the discrepancies between public survey data and actual consumer behavior. It emphasizes the importance of analyzing real-world actions, noting that despite survey results, Americans continue to spend money. The chapter suggests skepticism towards poll numbers until there is data indicating a change in behavior.
• 03:00 - 05:00: Trade Deals and Tariffs Strategy This chapter discusses the often misleading nature of stock market reports and predictions, beginning with a pessimistic comparison of the current stock market decline with historical lows, like the Great Depression. However, it highlights the market's resilience, as demonstrated by the NASDAQ's unforeseen recovery within a short period. The chapter emphasizes the discrepancy between negative media portrayal and positive market performance, noting the absence of media acknowledgment when the market rebounds.
• 05:00 - 07:00: Impact on Businesses and Economy This chapter discusses the impact of tariff negotiations led by President Trump, as mentioned in an interview with Time. President Trump claims to have made 200 deals related to tariffs. The conversation explores whether these are actual finalized deals or sub-negotiations within broader trade negotiations. There is skepticism about the existence and completion of these deals.
• 07:00 - 09:00: Future of US Manufacturing and Employment The chapter discusses the future of US manufacturing and employment, focusing on the country's global trade relationships. It highlights negotiations with 18 significant trading partners, excluding China due to its unique situation. The US has initiated a 90-day negotiation process to advance these relationships, with particular progress noted with Asian countries. The chapter also examines President Trump's strategy of announcing tariffs and subsequently retracting some to facilitate negotiation and progress in trade agreements.
• 09:00 - 13:00: US-China Relations and Negotiations This chapter delves into the complexities of US-China relations, particularly focusing on negotiation strategies. It highlights the concept of 'strategic uncertainty' from game theory, where one party does not reveal their final stance during negotiations to maintain leverage. President Trump's approach, known for imposing high tariffs as a stick, exemplifies these tactics. The discussion extends to the flexibility in negotiations, emphasizing the possible removal of tariffs if China engages positively.
• 13:00 - 15:00: Market Confidence and Economic Fundamentals This chapter discusses the dynamics of international trade, particularly focusing on non-tariff barriers, currency manipulation, and subsidies in labor and capital. There's a highlighted dialogue reflecting on certain Asian countries' promises to cease such practices. The speaker questions the fairness of the existing trading system and references President Trump's viewpoint, who refrains from blaming these countries.

‘I don't know if President Trump has spoken with President Xi’: Secretary Bessent Transcription

• 00:00 - 00:30 Now I am joined by President Trump's Treasury Secretary Scott Besson. Thanks for joining us this morning, Mr. Secretary. We appreciate it. Let's start with the polls. For the very first time, the president's polling numbers on the economy are underwater with 53% saying it has gotten worse under President Trump with 72% of those in our poll saying it is very or somewhat likely that his economic policies will cause a recession. Your reaction? Oh, well Martha, I haven't seen the polls and for the past 35 years, my business was
• 00:30 - 01:00 analyzing data. So, I think we've probably got to dig down in those. But what I do know is that Americans are behaving very different than what the surveys say. So, the the surveys may say that, but consumers are still spending. So, I prefer to look at what Americans are doing rather than how they're answering pollsters. and it and it doesn't worry you the poll numbers that you have seen uh when I start seeing data to the contrary then the uh we we
• 01:00 - 01:30 can look at that but you know again these poll numbers and also you know when when I look at the some of the things that are being published there was a story 10 days ago that said this is the worst April for the stock market since the great depression 10 days later the NASDAQ is now up on the month of April And I haven't seen a story that says, "Oh, stock market has biggest bounce back ever." So I Well, it certainly it certainly has gone back and
• 01:30 - 02:00 forth. Let's I think a lot of this is mediriven. Let let's let's talk about the Time interview with President Trump. He said that he has made 200 deals on tariffs. 200 deals. Who has he made deals with? Is there actually any deal at this point? Uh I believe that he is referring to sub deals within the negotiations we're doing and you know Martha if if there are 180 but those aren't actual deals Martha if there are
• 02:00 - 02:30 180 countries there are 18 important trading partners let's put China to to the side because that's a special negotiation there's 17 important trading partners and we have a process in place over the next 90 days to uh negotiate with them. Some of those are moving along very well, especially the with the Asian countries. And President Trump's strategy really has been to announce these tariffs, then dial some back,
• 02:30 - 03:00 pause them, make exceptions. Explain why you see this as a good negotiating strategy. Well, in game theory, it's called strategic uncertainty. So, you're you're not going to tell the the person on the other side of the negotiation where you're going to end up. And nobody's better at creating this leverage than President Trump. You know, he's shown these the high tariffs and it's here's the stick. The this is where the tariffs can go. And the carrot is come to us, take off your tariffs, take
• 03:00 - 03:30 off your non-tariff trade barriers, the stop manipulating your currency, stop subsidizing labor and capital, and then we can talk. But I tell you, Martha, that we've had several of these Asian countries that come in and said, "Oh, well, we'll stop doing this, this, and this." And I look at these lists and I think, how did we get here? How do we get here? Because this trading system has been so unfair. And as President Trump says, I don't blame the countries.
• 03:30 - 04:00 I blame the previous administrations that let him get away with it. But Mr. Mr. Secretary, look look at what you just heard from Barton O'Brien there. The administration says it's worried about Main Street, not Wall Street. But you heard that small businessman saying his inventory in China might as well be lit on fire because already what has happened and the concern about what's happening next? How do they plan for things if they don't know what's going to happen? Well, what what they know is that the China tariffs are unsustainable
• 04:00 - 04:30 because the Chinese cannot sustain this. that if the uh business people like the gentleman you interviewed stop ordering, China has no business model. You know, their business model is predicated on selling cheap subsidized goods to the US. And if there is a sudden stop in that, they will have a sudden stop in the economy. So, they will negotiate. Well, look, some of the leaders of of the big box stores, Walmart, Target, delivered a warning to President Trump
• 04:30 - 05:00 that some of the shelves could be empty within a matter of weeks. I know you're looking forward, but this is a concern right now and we that's why we are negoti negotiating these deals and we're we're moving the forward with this and again as the gentleman in Annapolis said Martha the goal is not to manufacture dog collars again in the US that the president is looking forward to the jobs of the future not the jobs of the past the goal is to bring back high
• 05:00 - 05:30 performance manufacturing jobs or create high performance manufacturing jobs. Right now, how long does that take? I mean, that is such a concern. How long does it take to bring that to the US? Well, it it is there a plan? Of course, but it's a process. Right now, the US has a barbell economy. We have a very advanced financial system. We have a tech exploration and development that is the envy in the world. On the other side, we are a natural resource economy
• 05:30 - 06:00 led by energy, which the previous administration tried to stifle. And in between is where workingclass Americans have lost out. And we want to bring back these manufacturing jobs or create these manufacturing jobs of the future. And we are meeting with companies that want to do this every day. And and this is that that moment of pain or that transition with pain. But again, how long does that last? Is there anything you can say about that? how fast you can bring these manufacturing. Well, look, Martha, it
• 06:00 - 06:30 it's a reallocation because what we are doing, the the federal government is shedding labor. We're trying to get the private sector to pick that up. But we have a very low unemployment rate. It's not like we have to create jobs. What we need to create are good paying jobs with fair trade. That is what the president's doing. Let let's talk about China. President Trump again said he's spoken to President Xi of China and negotiations are ongoing but China has firmly denied this saying that China and
• 06:30 - 07:00 the US have not consulted or negotiated on the tariff issue. So are negotiations actually happening? Who is talking? that look this was IMF World Bank week the NDC as you know and that I I had interaction with my Chinese counterparts but it was more on the traditional things like financial stability u global economic early warnings uh I don't know if President Trump has spoken with President Xi I know they have a very
• 07:00 - 07:30 good relationship and a lot of respect for each other but again I think that the Chinese will see that this high tariff is unsustainable for their business. Why would they deny that the negotiations are going on? Well, I think they're playing to a different audience. So, they're actually going on. There's actually things happening that the Chinese are just denying, but it's not true. That the we have a process in place. And again, I just believe these Chinese tariffs are unsustainable. Okay.
• 07:30 - 08:00 According to Bloomberg because of his Chinese business model, according to Bloomberg, you said recently that a comprehensive deal between the US and China could happen in two to three years. Trump said a deal will come quickly. You've heard him say that. You said obviously it was going to be a slog. So, how long do you think? Well, look, I I think that there is a path here. So the first first path will be again a de deescalation which I think the Chinese are going to have to have.
• 08:00 - 08:30 then I think there can be an agreement the in principle these 17 or 18 important trade deals that we're negotiating the actual papering of the trade deal a trade deal can take months but an agreement in principle and the uh good behavior and staying within the parameter of the deal by our trading partners can keep the tariffs the from ratcheting back to the maximum level.
• 08:30 - 09:00 Sure. and and and it's very rare. I think it happened a couple of times in the 70s for the dollars, stocks, and bonds to get hit as hard as they simultaneously did over the last few weeks. If the goal is to get countries to stand with us against China, does it worry you at all that investors seem to be losing confidence in the US? So again, you you're saying losing confidence and the uh I I don't think that this is necessarily losing confidence and any anything I've been in the markets for 354 years. Anything that
• 09:00 - 09:30 happens over a a two week, one month window uh can can be either statistical noise or market noise. And the we're in this for the long term. And the important thing is that we are setting the fundamentals for a strong dollar, a strong economy, strong stock market, and for investors to know that they that the US government bond market is the safest and soundest in the world. Okay. Thanks so much for joining us this morning, Mr.
• 09:30 - 10:00 Secretary.