Watch the interview on YouTube here .
Tucker Carlson: Mr. Secretary, thank you very much for joining us. So, the Treasury Department-President Trump had a press conference yesterday, next door, in which he announced a whole new global tariff regime. He’d been promising to do this, well, for 40 years, really. It came not out of nowhere, but it was clearly his intent all along, as stated. But it did rattle people, including some of his supporters. So I just wanted to ask you, big picture: where do you think this leads?
Sec. Scott Bessent: Well, Tucker, thank you for having me. And as you said, the President’s been talking about this for four decades. Yes. And this is transformational for the American economy, for the American worker, and for the new Republican alignment. And it’s a combination of the old and new ideas. Some of the old ideas were put away. You know, I always tell everyone-and they don’t want to hear it-the original tariff man was Alexander Hamilton. Yes. And he used tariffs to fund the new nation and to protect American industry. President Trump has added a third leg to the stool-he uses tariffs to negotiate. But I think this is not unlike… I was a freshman in college when Ronald Reagan came in, in 1980. A new day in America. And when I talk to people now, and they look back and they look at the Reagan years so fondly-yes, I remember what it was like. And it was choppy. The President? Very choppy. Very choppy. But President Reagan stood the course. And look, this is not an invitation-but at one point in the early ’80s, a farmer showed up with a shotgun at the Federal Reserve to kill Paul Volcker for raising rates. So like I said, that’s not an invitation for any action. But it was a tough time. And then in 1984, President Reagan won reelection with 49 states. I think they may have even let Mondale win Minnesota just so it wasn’t a skunk. Just to be nice. Yeah. And that’s what President Trump is doing now. For years, the American worker-the middle class-has been eviscerated. American workers have taken it on the chin. And, you know, we’re just starting to see some of the research now-like we’re seeing research on what’s called the China Shock from 2004. It’s just coming out now. And it’s what you know. It’s what I know. But finally, academics are saying, “Oh gosh, the American workers never recovered from the China Shock. What a surprise.” President Trump sensed it 40 years ago. But out on the campaign trail-starting in 2015 up until last year-he has promised the American workers that the old standard of living can come back. Because what we’ve seen over the past at least 20 years since the China Shock-but more like the past 30-are these massive distributional problems, where the coasts have done great, yes, and the middle of the country has just seen quality of life, life expectancy, decline. They don’t think their children are going to do better than they are. And a lot of people don’t care. And President Trump cares. This administration cares. And this is the first step towards realigning that. A lot of our trading partners, including some of our allies, have not been good partners. If tariffs are so bad, why do they have them? Quick question. Why do they have them, right? Or if the American consumer is going to pay all the tariff, then why do they care about the tariff? Right? Because they’re going to eat them. So I think that this is the beginning of a process. We’re going to reindustrialize. We’ve gone to a highly financialized economy. We’ve stopped making things-especially a lot of things that are relevant for national security. I think one of the few good outcomes from COVID was we had a beta test for what maybe a kinetic war with a large adversary could look like. And it turned out that these highly efficient supply chains were not strategically secure. So we don’t make our own medicines. We don’t make our own semiconductors. We don’t make our own ships anymore. So I think if I were to say, “Was there any good outcome from COVID?” it was-it woke the world up to these supply chain problems. So economic security is national security. President Trump and I have talked about that a lot. Okay, so this is a national security issue that we’re seeing here. But it’s also an economic security issue. And it’s to-I don’t want to say redistribute-but it is to give working Americans real wage gains and enhance their lives. And I’ve said out on the campaign trail-one of my most frequent mottos was: Wall Street’s done great. It can continue doing well. But it’s Main Street’s turn. It’s Main Street’s turn. And that’s what we saw yesterday: it’s Main Street’s turn.
Carlson: So over the course of my life-55 years-Wall Street really has been the commonly recognized measure of economic health. Like, how’s the Dow doing? We’ve got entire TV channels devoted to tracking its progress, which has mostly been up during the course of my life. So if the average of the equity averages falls-if the stock market falls-that’s seen by a lot of people as a measure that the economy itself is in decline. Do you think that’s a fair measure?
Sec. Bessent: Look, the market goes up and down. Warren Buffett has a saying: in the short run, the market’s a voting machine; in the long run, it’s a weighing machine. And in the long run, it’s going to weigh: do we have good policies? Yes. And I-in my former business-I commented on market structure, market ups and downs a lot. I’m trying not to do that now. Yes. But for everyone who thinks that these market declines are all based on the President’s economic policies, I can tell you: this market decline started with the Chinese AI announcement of DeepSeek. So the so-called “Mag Seven”-the tech stocks-have been doing very well for about 18 months. They led the market. And I think there was kind of a real dose of reality in what was going on in AI. And I think the U.S. is going to remain the leader in AI. But the AI-related stocks started coming down. So, like, if I were to analyze this in my old hat-and this is the only time I’m going to talk about my old hat-what’s happening with the market? I’d say it’s more of a “Mag Seven” problem, not a “Magnet” problem, right?
Carlson: So it’s deeper. So actually, the markets are-you’re saying in this specific case, with tech stocks-taking a real measure of the value of companies relative to foreign companies?
Sec. Bessent: Well, it’s that. But if we look at the equal-weighted S&P-even after today’s moves-it’s down 4% on the year. On a long-term chart, you wouldn’t even notice that. Yeah. And I think the most important thing that we can do-that I can do as Treasury Secretary, and that President Trump wants to do-is put in sound fundamentals for the underlying economy. And if the underlying economy is good-if taxes are stable, businesses have predictability, we have cheap and plentiful energy, if we deregulate, if we treat our workforce well-then we’re going to have a great stock market.
Carlson: Fair. The President suggested, in describing his plan for tariffs-he said, “Look, you could conceivably fund a lot of government with tariffs,” and that would suggest that taxpayers fund less of the burden. So do you expect that these will be accompanied by a congressionally approved tax cut for the middle class?
Sec. Bessent: I just want to go back for a moment to that-one of the things that the tariffs are doing is we are pushing back against other economic systems. So the Chinese have a very different economic system. They have low costs-some would call it literally slave labor. They subsidize industry with subsidized loans. They have a lot of non-tariff barriers. Your show can’t be shown there. Yes. So, we’re pushing back against that. And with the tariff income-it can be substantial. And if we think like a classical model of tariff income: let’s say there’s a 10% tariff. Then the currency would appreciate about 40% of that-so 4%. Then the producer in the other country would eat about 4%, and then the U.S. consumer might have a one-time price adjustment of 2%. So in a 10% tariff, maybe the consumer pays 2%. We saw a study out recently-from a group at MIT-that shows with President Trump’s first China tariffs, which were approximately 20%, the price level went up 0.7%. So to answer your question: if we could put on a 20% tariff, have the foreigners pay that, and use that money to bring down our government deficit and keep taxes low? That’s a very unique formula that hasn’t been tried in this country for a long time.
Carlson: Do you think-but it would require congressional participation to get there, right? To move tax rates? Of course, those are set by the Congress.
Sec. Bessent: Well, what we’re going to have now-we are in this very odd, what I would call “betwixt and between”-between the tariff income and what DOGE is doing in terms of cutting government expenses. So, CBO scoring-and for 35 years I was on the other side of the wall, and I would always say, “Oh, well, CBO says this”-I didn’t really realize that CBO scoring is a lot like Enron accounting. It’s not real. And when you actually look at the rules…
Carlson: But you assumed it was real on the outside-sure, “Well, they’re experts.” Congressional Budget Office.
Sec. Bessent: It’s the Congressional Budget Office, and they’re well-intentioned people. They just have nonsensical rules. Think about this: when all the scoring is done over a 10-year window, they just assume 1.7 or 1.8% economic growth over the 10 years-and that never moves. Whether you raise taxes or cut taxes-it doesn’t move. So that’s why, like during the campaign, when Vice President Harris was announcing all these big tax increases she wanted to do and things like that, the CBO was scoring her very well. And President Trump wants to make the 2017 tax cuts permanent-that was kind of a blowout number. Because obviously, growth is going to go up a lot when you cut taxes. So, that was a long way of saying: we will not get credit for the tariffs in any bill, because Congress is not going to legislate it. The President’s doing it with executive authority. But the money will be coming in. We’ve already taken in several hundred million dollars on the China tariffs from his first term. We’ve taken in about $35 billion a year just on the old tariffs-not the new ones. So in the CBO window, that’s about $350 billion, which pays for a lot of the President’s promises: no tax on tips, no tax on Social Security, no tax on overtime, making interest deductibility available on autos made in the U.S. And think what the President is doing here: he is backing into an affordability solution for the bottom 50% of wage earners. Because they are the ones who will benefit from all four of those programs.
Carlson: So looking at, say, a year from now-so next, beginning of next April-do you have any sense of how much the U.S. government anticipates bringing in from the tariffs announced yesterday?
Sec. Bessent: It’s going to be a moving target, sure. But could it be anywhere from $300 billion to $600 billion a year? Sure.
Carlson: That’s-that’s meaningful revenue.
Sec. Bessent: Very meaningful. But what will happen with tariffs over time-the ultimate goal of the tariffs, and the President says it all the time: bring your factory here. That’s the best solution for getting away from a tariff wall. So move your factory from China, from Mexico, from Vietnam-bring it here. What will happen over time is: we’ll have substantial tariff income in the beginning. Manufacturers will build their factories here. The tariffs will drop. But the revenue from the factories-from income taxes, from all the new jobs-will go up. So we’ll be taking it in domestically as the tariffs drop. And why are the tariffs dropping? Because we’re making it here. And our trade deficits are dropping.
Carlson: So you’ve obviously thought this through. Do you think the United States has the necessary labor force for this transition?
Sec. Bessent: I think we do. I think with AI, with automation, with so many of these factories going to be new-they’re going to be smart factories-I think we’ve got all the labor force we need. And what we’re doing on the other side-one of the reasons, other than my support for President Trump, that I came out from behind my desk-I had a pretty good life-and I wanted to come out and really tell people that I was worried about an impending financial calamity, given the high levels of government spending that were leading to high levels of government debt. So what we are doing: on one side, the President is reordering trade. On the other side, we are shedding excess labor in the federal government and bringing down federal borrowings. And then on the other side of that, we will have the labor we need for new manufacturing. We’re going to re-lever the private sector. So the private sector, in essence, has been in recession during the Biden years. This is an opportunity to right-size the federal government and unleash the private sector again, because it’s been hemmed down by excessive regulation and it’s been crowded out by the government.
Carlson: Here’s a fact of life you may not learn till you’re older, but I’m going to tell you now: it’s very hard to have a good time if you’re wearing bad boots. In fact, it may be impossible, and that’s why you need Tecovas. As a matter of fact, you don’t just need them-you owe them to yourself. So let me ask you-since your job is, in part, to forecast the effects of these policies-do you ever think: we’ve got probably one out of six people in this country here illegally, maybe 50 million illegal aliens, and the President says he wants to deport them. Then you have AI, and the projections there are massive labor market disruption-fewer people needed, you alluded to that a minute ago. Then you have the tariffs. And we can guess at their effect, but we don’t really know, because we’ve never done it. And then you have the reaction from the rest of the world to those tariffs. There are so many huge factors that are effectively unknown-that are black boxes. Do you ever think, “Wow, it’s kind of hard to know what’s going to happen”?
Sec. Bessent: Look, it is. And I always think-you can never be 100% sure. But you can stay within some guardrails and keep moving forward. I can’t remember which Sunday morning show I was on a few weeks ago, but the commentator asked me, “Can you guarantee me there won’t be a recession?” And I said, “I can’t guarantee you anything. There’s nothing that tells me there should be one.” So I believe this is going to work, just like President Reagan believed supply-side economics was going to work. What I do know is that the old system wasn’t working. I think that’s right. And if you look at a system that’s not working, you’ve got to be brave to change it. So what wasn’t working? Would it have been really fun for me to come in and just keep issuing a lot of debt? It’s almost like a bodybuilder taking steroids-outside, looks great, muscular. Inside, you’re killing your vital organs. That’s what was going on here. It would’ve been easy to keep pumping up the economy, borrowing a lot of money, creating a lot of government jobs-there’s no controversy when you’re doing all that. But you were going to end up in a calamity. Go back and look at the financial crisis in ’07-’08. The economy looked great right up until it didn’t. Look at the end of the dot-com bubble, then the whole credit problem, the fraud at WorldCom, Enron-some other companies. The economy looked great… until it didn’t. And I think one of the things we won’t get credit for-but that this administration will have done-is avoiding a financial calamity. Think about it: there’s an analysis that one of the reasons 9/11 happened was because the airlines didn’t want to pay for reinforced cockpit doors. They kept pushing back, FAA didn’t push hard enough. Well now we’ve got the reinforced doors. So I look at it this way: we’re putting on the reinforced doors before the crash.
Carlson: What’s the lobbying scramble by foreign governments going to be like over the next three months? Because the President said yesterday, “I’m putting a universal tariff,”-you know, one standard. But then of course, each country is adjusted according to a lot of different factors: trade deficit, currency manipulation, regulation, tariffs. But this is all, as you said, a moving picture. So like-if I’m a country like Vietnam, or China-I mean, I’m going to try really hard to bring pressure to bear on this administration to adjust those numbers. What’s that going to be like?
Sec. Bessent: It’s going to be the President’s decision. And I think his view is: this has been going on for a long time-for friends and foes-and we’re going to see where this plays out. I think what’s going to be more important than the discussions with countries is the discussions with companies. What do companies want to do? As President Trump said yesterday, the best way to get around the tariff is: build your factory here. And what can we do here at Treasury to help that? We’re pushing to get the tax bill done so we can guarantee the low taxes, full depreciation within the first year. We’re working with Secretaries Burgum and Wright on energy security. We’re working on getting the regulations down. The President-I don’t know whether he talked about it yesterday or the day before-but Taiwan Semi, the biggest semiconductor manufacturer in the world, needs permits. Lee Zeldin, the EPA commissioner, is working to push through all the permits they need. Because we’ve just gone into this regulatory morass where it takes so long to get things done in this country. So I think what will be more interesting are the individual company announcements-more than the country announcements.
Carlson: You want to sell to Americans? You’ve got to make it in America. Sure. Or pay the tariff. So how is China, as a nation, going to respond? I mean, this is such a big challenge-it’s directly in their face. It’s about every country on the globe, but it’s really, more than any other country, about China. I think that’s fair to say. How are they going to respond? What’s the retaliation look like?
Sec. Bessent: Well, I don’t know if they can retaliate-for a couple of reasons. If you look at the history-and I used to teach economic history-when you look at it, we are the debtor nation. Yes, we have the trade deficits. The surplus nation is in the weaker position. Because the Chinese business model-and by the way, the Chinese business model and economy are the most imbalanced in the history of the modern world. We’ve never seen anything like this in terms of their export level relative to GDP, relative to population. So I think it is going to be very difficult for them to try to change the model. They’re trying. They’re in a deflationary recession-slash depression-right now. They’re trying to export their way out of it. And we can’t let them do that. But when you think about it, the Chinese manufacturing system is like that old Disney movie with the brooms carrying the buckets. There’s nothing you can do-it just keeps going. That’s their business model. It’s not going to stop. Now, what could happen-if you were to say, “Scott, what’s the dream scenario?”-it’s that somehow there could be a deal where the U.S. and China… We want more manufacturing, which would mean a smaller part of the economy is consumption. The Chinese have this imbalanced economy with too much manufacturing. And actually, Chinese consumers really get the short end of the stick. Chinese households-they’re caught in what’s called the middle-income trap. Could we do something together where they rebalance-consume more, manufacture less? We consume less, manufacture more? We’ll still be military rivals. There’ll still be economic rivalry. But we’d level the playing field by a lot. Now, that’s not going to happen tomorrow. That’s not going to happen in a month. But over the next few years, they may have to come around. Because I think their business model is broken. I think President Trump has broken their business model with these tariffs.
Carlson: So you’re describing, you know, the famous scenario where-if you take out a bank loan, the bank is in charge. But if you take a big enough loan, you’re kind of in charge of the bank.
Sec. Bessent: Exactly. And they’ve just got such a big deficit with us that they need our markets. They can’t survive without them.
Carlson: Are you confident that there’s a clear enough channel of communication between the two governments-that the details can be worked out and nothing will go crazy in the meantime?
Sec. Bessent: I think what gives me a lot of confidence is the relationship between President Trump and Chairman Xi. When you have a direct line of communication at the very top, then I think it’s very difficult for things to go haywire.
Carlson: What about the rest of the world? What about Europe?
Sec. Bessent: Look, the Europeans-go back to that famous meeting where President Trump told the Europeans: “You’re insane for building Nord Stream 2. What are you doing? You already get most of your energy from Russia and you’re going to double down on it?” And they did. And look what happened.
Carlson: So we blew it up.
Sec. Bessent: Putin. Some Norwegian fisherman bumped into it is what I read. But the Europeans go kicking and screaming-but I think they’re going to have to rebalance too. Germany has a very imbalanced export economy. They were on the verge of deindustrialization. They were the opposite of us: they had expensive energy, they were depending on Italy and the countries in the south to keep the euro suppressed, and they were selling into China. Now China is becoming their competitor.
Carlson: So you said at the outset-the first example, the analogy you used-was President Reagan’s first term. Big win in ’80, recession in ’82, wipeout, and then the biggest landslide in history in ’84. So you’re suggesting, by saying that, that the fruits were obvious within the first term-within four years?
Sec. Bessent: They were. Only difference now is, there was a lot of competition back then-but there was a level of civility. The real danger here-if there were a midterm loss, and I don’t think there has to be-you know what’s going to happen. I know what’s going to happen. Democratic House is going immediately to impeachment for something, of course. The lawfare is going to start again. And I think the American people are going to hate it-again. Einstein’s definition of insanity: doing the same thing again and expecting a different result.
Carlson: Do you think that-and this is really aimed at the people who support President Trump and who agree with you wholeheartedly that the current system was really bad. And, like, drive across the country, you’ll see how bad it has been-horrible. It lowered life expectancy. But the people who are hoping that yesterday’s move will lead to a demonstrably brighter future within four years- Is it your sincere prediction that within four years, we’ll say, “Actually, that kind of worked”?
Sec. Bessent: I believe that it’s going to work. And I know that what we were doing wasn’t working. Yes. So I think we have to try this. And I have a high confidence ratio it’s going to work. And I have a very high confidence ratio… The good news is, we have President Trump’s previous term, when everyone said none of this was going to work: “Oh, the China tariffs are going to do this. They’re going to cause inflation.” They didn’t. “This is going to hurt working-class Americans.” Well, guess what? Working-class Americans-hourly workers-did better than supervisory workers. The bottom 50% of households-their net worth increased faster than the top 10% of households. I’m not happy with what’s going on in the market today, but the distribution of equities across households? The top 10% of Americans own 88% of equities. Eighty-eight percent of the stock market. The next 40% owns 12%. The bottom 50% has debt. They have credit card bills. They rent their homes. They have auto loans. And we’ve got to give them some relief.
Carlson: That’s the message right there. Just as a bystander, I’m like, “Wow. Okay. All right. Heard that.”
Sec. Bessent: I like the examples. And I was really struck by two different statistics last year-summer of 2024: Americans took more European vacations than they had in history. Summer of 2024-more Americans were using food banks than they ever have in history. I went into two food banks near my hometown to ask, “What’s the story?” And they said, “You know, for a lot of people, it really takes a loss of dignity to walk into a food bank.” Of course. But they were seeing a new phenomenon: it wasn’t their traditional clientele. It wasn’t people who lost their homes. It wasn’t people out on the street. These were working families who could no longer afford $100 at the grocery store. That basket of groceries every week-they were missing five, six, seven things. And they were coming to the food bank to top up. So that’s not a great America. Record European vacations. Record food bank usage. No reason we can’t keep the record European vacations going-but we’ve got to take care of these other people. And you know what? They don’t want handouts. The Democrats had this strategy called “compensate the loser.” First of all, the name of that strategy? I don’t think the bottom 50% of Americans are losers. I think the system hasn’t worked for them. I think they are winners-it’s just a bad system. So we are going to fix the system. And look-they want good jobs. They want their kids to do better than they do. They want to own a home. They want to pay down their debt. This isn’t hard. And I think we can do this in the next four years.
Carlson: It used to be only crazy people thought they were being watched all the time-surveilled-the guy mumbling next to you on the bus. But now, anyone who knows what’s going on thinks that, because it’s true. Your phones are listening to you. Tech companies are tracking all your online activity in order to profit off what ought to be private information. Governments are watching too. It’s a corrupt system. It’s frightening. And the worst part is-it’s all legal. Government certainly will not help stop this. Of course, the intel agencies love it. So it’s up to you to protect yourself. And that’s where ExpressVPN comes in. So-you grew up in a middle-class, working-class background. You were very successful. Lived in rich-person world for a long time while this was all going on. And I just have to ask you candidly: were you ever at dinner with people who were like, “Wow, we’re doing great”? I live in rich-person world too. I’m not criticizing you at all. But did anyone at dinner ever say, “Wow, I just drove 100 miles-this country doesn’t look good. People are not thriving.” Was there any sense of that among the people you knew?
Sec. Bessent: No. They were more like, “My NetJets was an hour late. I had the worst day. I’m switching charter companies.” Look, Tucker, I’m especially attuned to what I think is going on with the United States because-I’ll tell you, my family was very affluent. Early settlers. We were very affluent for about 250 years. My dad made a lot of bad financial choices. So when I was born-the first six, seven, eight years-we were affluent. He lost everything. So I’ve seen what that’s like. I’ve seen both sides. I was fortunate enough to be able to make it back. I know what economic insecurity is like. And I don’t think people should have to have that. If you want to work hard-and people want to work hard-you were out on the campaign trail with President Trump. I was out on the campaign trail. And I’ve got to say-one of the most moving things for me was at the final two stops: Pittsburgh and Grand Rapids, Michigan. In Pittsburgh-in the Duquesne arena-I walk in, and there are the union workers. The steel workers. They’ve got on their hats. They’ve got on their vests. They’re there with their children. It was very moving. They just want a better life. They want their communities to be sound. They want their kids to do better. They want Little League baseball. They don’t care what’s going on on Madison Avenue. They don’t know what the hot new restaurant is in Paris. And President Trump has somehow assembled this incredible coalition-Elon Musk, the richest man in the world, the folks who were in the Rose Garden yesterday, and the people I saw at the Duquesne arena. I think it’s unbelievable.
Carlson: Interesting. What do you worry about as Treasury Secretary? I mean, obviously-probably lying in bed at night, thinking about all the things that could go wrong with the U.S. economy. What are your-if you could be honest-what are your biggest worries?
Sec. Bessent: So, to the extent that in my business career I had a strong point, I think it was risk management. I view myself as the United States’ leading bond salesman. Yep. And I think that with what’s going on, I’m going to have a better and better story to tell as we get our economic health and fiscal house in order. Then I try to imagine what could go very wrong. What would we do if there were another outbreak similar to COVID? You can’t worry about things like that-but I worry about a kinetic war somewhere. What would we do in the event of something happening? What I try to do is create the situation where I can worry a little less every day. So I’ll tell you: I came in-I was confirmed on January 28-and during the month of January, 10-year interest rates-which is probably the most important rate in the country, since mortgages and capital formation are based on it-had almost spiked to 5%. And I think 5% can be an uncomfortable area for the economy, for Treasury, for issuing bonds. Now that I’ve gotten in, I worry a little less. But I still worry. We’ve got a tremendous amount of debt to roll. And I worry that we won’t do the smart cuts and focus on waste, fraud, and abuse. I worry that that gets sidelined. Then on the other side, I worry that the tax bill somehow gets bogged down. We could have the largest tax increase in history. Or I worry about the usual geopolitical things-whether it’s Iran, Taiwan-that something goes haywire between Russia and Ukraine.
Carlson: So you began your job description by saying you’re a bond salesman. You’re selling America’s debt to the world. And I know that was a big part of the portfolio as the transition was envisioning it-“Who can make the case for American bonds to the world?” How is your case? Are you confident you can do that? And how is your pitch changing after yesterday?
Sec. Bessent: Right now we’re in this strange “betwixt and between,” because we’re going to take in substantial tariff revenue. And what DOGE is doing is substantially cutting expenses. But we’re not getting credit for it right now. I think the market’s starting to get a hint of it. The 10-year bond, which had almost peaked at 5%, is now through 4%. A way to think about it is: every 100 basis points is about $1 trillion in savings. So we’ve saved $100 billion. That’s probably not going to happen that quickly again. But I think we are setting the sails for a much better fiscal time. People don’t have to say, “The U.S. is out of control. The U.S. is going to default.” We’re not. And I think every day, my case gets better.
Sec. Bessent: And like, if we were to just imagine a very reductionist formula for government-G equals S minus T-government spending minus taxes. For “spending,” our side-the Republicans-likes to spend, but less than the Democrats. But both sides like to spend. Then you have “minus T”-taxes. Democrats like higher taxes. We like lower taxes. What if the “S” actually went down? To me, that’s the exciting part. That’s been unthinkable in everybody’s calculation.
Carlson: No one’s even seriously raised it-including Ronald Reagan, by the way.
Sec. Bessent: Right. And look, I think President Reagan had a different agenda. He ramped up defense spending. And remember-“Oh, he’s crazy. It’s going to break the budget. Star Wars is crazy. He’s a madman.” And then the Iron Curtain went down. So it’s actually a Soviet term. He used the Soviet strategy on themselves-on the Russians. Escalate to de-escalate. We escalated military spending. They tried to keep up. And then they collapsed. Everything’s easy in hindsight. But I think here, what we’re doing-bringing down these incredible levels of spending-but more importantly… I tell anyone who will listen: DOGE is the Office of Government Efficiency. Not Elimination. Not Extinction. So what if we can actually do a better job with less? Seems inconceivable-but when I see what’s going on in a lot of these government agencies, it’s unbelievable. Like, I’ve lived in Manhattan, I’ve lived in Florida. Roughly, the state of New York and the state of Florida have the same number of people. Actually, Florida has a few more now. New York’s budget is about $235 billion. Florida’s is $125 billion. How do they do that? Oh yeah-and there’s no income tax in Florida. Oh yeah-and the roads are better. You go to get your driver’s license-it takes 15 minutes, not five hours. So can we make the rest of America look more like Florida-and less like New York?
Or one day, is New York going to look more like Florida?
Carlson: So do you think after four years, we will see an actual net reduction in government spending-thanks to DOGE?
Sec. Bessent: Inflation-adjusted? Yes.
Carlson: How long do you think Elon is in for?
Sec. Bessent: Day to day? I don’t know. But I think his imprint is going to be with us a long time. And I think the mainstream media has tried to demonize DOGE and all the folks who work with him. And we’ve got a couple of Treasury-a couple of IRS-employees who I hired, who I interviewed. I’ll tell you-there’s one fellow, Tom Kraus. He was on TV with Bret Baier the other night. Tom’s incredible. He’s done $100 billion of tech mergers. With my investment business, I would’ve hired him. I don’t think I could have afforded him. He is doing this for the good of his country. He came in without touching any of the payment systems-contrary to what the Washington Post falsely reported. He analyzed the system, and within six weeks, pointed at all the vulnerabilities. There’s a young man named Sam Kirkos, who was on Laura Ingraham with me the other night. That was my idea-bring him out of the shadows. Let’s make this demonization stop. This young man-other than the fact that he only owns one pair of pants, which he likes telling everyone-I’d be happy if our daughter brought him home. He’s a patriot. He’s working hard for the country. He’s analytical. And the things he’s seen at the IRS-just in their tech systems-and that’s all he does. You know, Elon has a shirt that he wears under his jacket. He flashes it every once in a while. It says “Tech Support.” That’s what we’re getting. We’ve got a Blockbuster-style government in a Netflix world. We’re hailing cabs in an Uber economy. Why can’t the government be in the gig economy? Not hard.
Carlson: We’re not positive that cryptocurrency is the future of finance-but we do know that what we have now is broken and dangerous. Can I ask you a weird question? Who runs the Federal Reserve, exactly? How can you have this pivotal institution that has the most direct effect on markets-but it seems outside of political control?
Sec. Bessent: Well, look-I was at a dinner Jerome Powell attended last night. During my confirmation hearing, I said: I’m only going to talk about the mistakes the Fed has made in the past. I won’t talk about the ones they’re going to make in the future. But I think it is important that monetary policy be walled off. Some of the other things they’ve done-like DEI, like climate-they impinge on their monetary credibility. I think the Fed should focus on monetary policy-doing the best they can for the American economy, the American people. Keeping inflation low. There are a lot of other banking agencies to do the rest.
Carlson: The Fed controls the weather now too. What were they doing with climate?
Sec. Bessent: Well, Treasury chairs something called the Financial Stability Oversight Council. It’s all the financial regulators. Two weeks before Silicon Valley Bank went under, FSOC issued a report. They said the biggest risk to the financial system was climate. Really? Not that a large bank in California was having a slow-motion run on its assets? They failed. The regulators failed. People are getting sick of that. And it goes back to one of my favorite Trump phrases: common sense. It’s just common sense. If your deposits can leave with a click-you shouldn’t have all these long-term assets. But the regulators were too busy worrying about the weather. And there was also some degree of regulatory capture. The CEO of Silicon Valley Bank was on the board of the San Francisco Fed-his chief regulator. They’re going to tell that guy what to do.
Carlson: Why is gold moving around the world in such huge quantities right now?
Sec. Bessent: A couple of reasons. It’s moving physically. Uncertainty about whether gold would be exempt from tariffs. I believe we have exempted it. But there was a big move out of vaults in Switzerland and London to get it into New York. Gold has always been a store of value. We’re seeing huge demand from China. They’re in an economic recession or depression. Their people don’t trust the yuan. There are capital controls. 1.4 billion people want to get their money out-and they can’t. But they can buy gold.
Carlson: Do you find it interesting that even now-in 2025-when everything is abstract and digital, gold is still believed to be reliable?
Sec. Bessent: Gold has history going for it. A friend of mine’s grandmother, during Russia’s financial crisis in ’98, bought 18 bicycles. That was her store of value.
Carlson: How’d she do on the bike investment?
Sec. Bessent: Great. I wish I’d done that well. Gold can’t run a deficit. It can’t default. It can’t go to war. It’s isolated from government failure. That’s why people trust it.
Carlson: So you’re not anti-gold?
Sec. Bessent: Oh no. When I had my fund, people would’ve called me a gold bug.
Carlson: How did you wind up interacting with Zelensky?
Sec. Bessent: The President asked me to go to Kyiv. He actually asked me to lead the economic agreement that was part of his peace plan. It’s important to understand the arc of President Trump’s peace plan. He sequenced it well:
- Sign a deal with the Ukrainians to link the U.S. and Ukraine closer together.
- Signal to Russian leadership that we’re not abandoning Ukraine.
- Show the American people that we have an economic stake in Ukraine-this isn’t just about massive grants.
So if Ukraine succeeds, we succeed. It could be a long-term partnership. I thought it was important to take the agreement to Kyiv and present it to President Zelensky. Everyone was telling me, “Oh no, meet him in Vienna. He’ll be at the Munich Security Conference.” I said no-I want to go there and discuss it with him. So that’s how I ended up in Kyiv. Very interesting trip: fly to Poland, then get on this 10-hour night train and arrive in Kyiv at 8:30 in the morning. And for everyone who said, “President Trump is selling out to the Russians”-he’s not. The Russians bombed Kyiv four hours before I got there. They hadn’t bombed since November. They didn’t like the look of this deal-it was durable for both the American and Ukrainian people. President Zelensky was in the mood to sign the deal that day. We had a spirited discussion. I said, “You’ve got 50 reporters out there. I’m here to show there’s no daylight between our two peoples, our two governments. You’ve opened up daylight the size of the Grand Canyon.” He said, “Tell them I’m going to sign the deal in Munich.” I said, “So when you see Vice President Vance and Secretary of State Rubio, you’ll sign it?” “Yes.” He didn’t sign it there. Then the following week, his team begged to come to the White House. We said: sign the deal first. He got to the Oval Office and blew up what should have been the easiest thing to do in the world. He was supposed to show up, have a press conference, then we’d have a private lunch. If he had anything to air, that was the time. There’s a famous photo in the East Room-everything laid out, ready to be signed. It never got signed.
Carlson: So this is an unelected president of a client state, whose bureaucrats are being paid directly by American taxpayers-including retirement accounts?
Sec. Bessent: Yes. And they have the lowest retirement age in Europe-60. France is 62. Italy is 67. We’re paying for that.
Carlson: And yet-this man is in a precarious position-and he acts high-handed, sniffs a lot, berates American officials. How do you account for that arrogance?
Sec. Bessent: Well, a couple things. He was a performer-a vaudevillian. An ordinary person thrown into a fraught time. He rose to the occasion. He was heroic. But now he’s stuck. Some in his cabinet are good. Some of the people around him-not so much. He’s not getting the best advice. And here’s the thing: the agreement made sure the money came to the American people and the Ukrainian people. Let me tell you what it wasn’t:
-It wasn’t one of these rapacious Chinese deals-“Sign over your mine, your port…”
– It wasn’t a loan-to-own scheme-“Here’s a loan you’ll never pay back so we take your asset.” It was a real economic partnership. They put in assets. We put in loans through our development banks. We put in American know-how. We don’t make any money unless they make money. You know who didn’t like that? People with their hands in the till. Because we were regulating the flow of money. That’s part of the glitch. I’m hopeful that it was a bug, not a feature. We’re expecting a Ukrainian technical team next week. I’m hopeful we can get it signed and return to a win-win. President Trump’s plan was: Sign with Ukraine. Show Russia we stand with Ukraine economically. Bring Russia to the table. The sequencing’s been thrown off-but I think we can fix it.
Carlson: Are we ever going to get an audit of where all of our billions went? The weapons? The cash? The pallets of $100 bills? Why is that so hard?
Sec. Bessent: I don’t know. I always try to look forward. If this deal works, that money could end up being small change. Think about this: in 1991, when the Iron Curtain fell, Poland and Ukraine had economies of similar size. Today, Poland’s economy is 3.5x or 4x bigger-and growing. Ukraine? Held back by kleptocracy. With U.S. assistance and a Trump-brokered peace, the Ukrainian people could finally move forward.
Carlson: For a Treasury Secretary, you’re a very capable diplomat, I must say-very diplomatic language. Last question: because this is all so new-just going back to the tariff announcement-how do you keep message discipline in the administration? Who decides how to explain this? How do you keep everyone on the same page?
Sec. Bessent: We all take President Trump’s lead. We had a meeting yesterday morning. Then a meeting after the Rose Garden announcement before we went out on media. He’s his own best spokesman. No one does it better. Then we fan out-and we are all unified behind his vision. That’s why we’re here. If you don’t want to be part of it-you shouldn’t be here.
Carlson: Do you ever say, “Hey, this person reassures markets; that person scares them-let’s send the right person out?”
Sec. Bessent: The one thing I’ll say: no one should listen to anyone in the markets talk about the U.S. dollar other than President Trump or myself. We’re the only ones who speak for this administration on dollar policy. We have a strong dollar policy. And we’re putting in all the ingredients to make sure the dollar is strong over the long run. Can it go up and down in the short run? Sure. Can there be bilateral moves between the dollar and other currencies? Sure-that’s what I made a living doing. But over time, if we put in sound fundamentals and follow through on this transformation, the dollar will do great-and so will the American people.
Carlson: Secretary, thank you very much. Appreciate it.