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Treasury Secretary Scott Bessent's America 250 Address: Economic Statecraft, Tariffs, and the Dollar — Transcript

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0:00Good evening. Hello and welcome to the
0:03855th,
0:05yes, the 855th meeting
0:08of the Economic Club of New York and to
0:11our gala celebration of the 250th
0:14anniversary of the United States.
0:17My name is Bob Steel.
0:19>> [applause]
0:24[applause]
0:25>> My name is Bob Steel, partner of Perella
0:27Weinberg and chair of the club. It's a
0:30pleasure to have all of you here with us
0:32this evening for what is going to be a
0:34very special night.
0:36The Economic Club is proud to stand as
0:39the nation's leading non-partisan
0:42platform for discussion on economic,
0:45social, political, and policy matters.
0:49For more than a century,
0:51the club has hosted over 1,000
0:54preeminent guest speakers, contributing
0:57to this amazing tradition of excellence.
1:01Tonight's gathering is especially
1:03meaningful as we celebrate the nation's
1:05250th anniversary and reflect on our
1:09enduring values, achievements,
1:12and the opportunities that have defined
1:14the American experience.
1:17To help us mark this historic occasion,
1:21we're exceedingly privileged to have
1:23back at our club
1:26my good friend, fellow club member, and
1:29United States Secretary of the Treasury,
1:32the Honorable Scott Bessent.
1:35>> [applause]
1:40[applause]
1:42>> As you may remember, Secretary Bessent
1:44addressed the club shortly after his
1:46confirmation on March 6th, 2025.
1:50At that time, he gave a clear
1:52perspective on what he was thinking
1:54about as key objectives. He highlighted
1:57deregulation of financial services, the
1:59focus on tariffs as a tool for balanced
2:02to trade, and understanding that
2:05economic progress was completely
2:07interlinked with national security.
2:09Those were the three points that the
2:11secretary made at that opening market.
2:14With over 41 years in global investment
2:16management, the secretary is a
2:18recognized expert in currency and fixed
2:21income markets.
2:23He previously served as chief investment
2:25officer of Soros Fund Management and
2:27later founded Key Square Capital
2:29Management, a global macro hedge fund.
2:33He also taught economic history at Yale
2:35University and has contributed to
2:37leading economic journals. A South
2:39Carolina native, Scott holds a BA from
2:41Yale University. He and his family have
2:44supported numerous philanthropic
2:45efforts, including the McLeod
2:47Rehabilitation Rehabilitation Center,
2:49Harlem Children's Zone, and Rockefeller
2:52University.
2:53In addition to being a member of our
2:55club, he's a member of the Council on
2:57Foreign Relations and remains a strong
2:59advocate for financial literacy and
3:01education. The program tonight will
3:04begin with remarks from the secretary,
3:06followed by a fireside chat moderated by
3:09Mr. Bret Baier. We're honored to welcome
3:11Bret, chief political analyst and anchor
3:15for Fox News and anchor of Special
3:17Report with Bret Baier for what promises
3:20to be a timely and engaging discussion.
3:22After the fireside chat, Secretary
3:24Mnuchin will answer questions from
3:26several select people on the dais. A
3:29reminder to all of us that this
3:30discussion is on the record. We do have
3:34lots of media in the room and online and
3:36will contri- conclude the program at a
3:39few minutes after 8:00. Now, without
3:41further ado, please join me in welcoming
3:43to the podium our good friend, with
3:45great appreciation, the secretary, Scott
3:47Mnuchin.
3:48>> [applause]
3:55>> Goody and Bob, thank you for that kind
3:57introduction and for the invitation
4:00to be [clears throat] here on this
4:01wonderful occasion.
4:03As a long-time member of the Economic
4:05Club of New York, I know that it
4:06occupies a special place of great
4:08significance in our nation's discourse.
4:11For generations, few institutions have
4:14done more to shape how we confront the
4:16defining questions of the day.
4:18And yet, across all those years,
4:20tonight's gathering is without precedent
4:23as we assemble on the eve of an
4:24extraordinary moment in our history.
4:27Over the coming days, we will celebrate
4:30250 years of the American story and the
4:33proposition with which it began, that a
4:36free people answer to no power but their
4:40own.
4:41>> [applause]
4:46>> Milestones this magnitude demand more
4:49than ceremony. They ask something of us.
4:52They invite us to reflect on the
4:53creation of our country, of course, but
4:56no less on its condition. Indeed, the
4:58most fitting way to honor those who
5:00founded this nation is to meet the great
5:03challenges of our own time with the same
5:06resolve that they brought to theirs. And
5:09in that spirit, under President Trump's
5:11leadership, the US Treasury is working
5:14to restore economic security as the
5:16foundation that allows a nation to
5:19fulfill its most basic obligations.
5:22In my remarks before the Economic Club
5:24of Dallas, I detailed how the structural
5:27vulnerabilities that we allowed to
5:29accumulate over time precipitated a
5:31drift into dependence. And last month,
5:34before the Reagan Library, I noted that
5:37under President Trump, America has
5:40awoken to the risk we can no longer
5:42ignore and is now attuned to the
5:44responsibility that we can no longer
5:47neglect.
5:48So tonight, I would like to take the
5:50next step and describe our strategy for
5:53economic statecraft, by which I mean the
5:56disciplined use of America's economic
5:58power in the service of our sovereignty.
6:02For the better part of a century, the
6:03United States was a principal architect
6:06and guarantor of an open global economic
6:09system that delivered enormous benefits.
6:12It raised our allies from the ruins of
6:14war, widened the channels of global
6:16trade, lifted standards of living, and
6:19attained a position of influence that
6:21remains unmatched in modern history.
6:25But the success of a system does not
6:27absolve us from revisiting its
6:29assumptions.
6:30America shaped the post-war order in a
6:33world in which our overriding task was
6:36to help our allies rebuild their
6:38economies and defend against the spectre
6:41of communism. We accepted asymmetries
6:44because they served a larger strategic
6:47purpose. We opened our market because it
6:49helped to create a more prosperous
6:51world, and we tolerated imbalances
6:54because American economic strength
6:56appeared unassailable.
6:58Over time, however, these choices
7:00hardened into habits, habits into
7:03assumptions, and assumptions left
7:05unexamined into vulnerabilities.
7:08We came to believe that access to the
7:10American market could be extended
7:12without condition and therefore without
7:15consequence. We assumed that closer
7:18economic integration would always result
7:21in a greater convergence of interest.
7:24The supply chains would function in
7:25every crisis, low prices would
7:27compensate for lost capacity, and above
7:31above all, that other countries would
7:33treat our firms as fairly as we had
7:36treated theirs.
7:37Of course, those assumptions failed to
7:39materialize fully. Some slowly, others
7:43all at once. In recent decades, we've
7:45watched strategic industries migrate
7:47abroad, critical supply chains
7:50concentrate in jurisdictions that do not
7:52share our interest,
7:53foreign subsidiaries forced technology
7:56transfer, discriminatory discriminatory
7:59taxation, and non-market practices
8:02distort competition, and American firms
8:05grow to global scale only to become
8:07targets of policies designed to
8:09constrain or replace them. Beneath each
8:13of those outcomes lay an economic policy
8:15that became unmoored from our national
8:18strategy.
8:19We've emboldened other countries to
8:21exploit our dependence as leverage, and
8:23to repair those imbalances with the
8:25world is not to retreat from it. It is
8:28not to retreat from it. On the contrary,
8:31it is to engage on terms that make
8:33America stronger. It is to insist on
8:35trade that is fair, reciprocal, and
8:39consistent with our national interest.
8:41And it is to more closely bind what we
8:43should have never allowed to cleave, our
8:45economic and national security. So,
8:48tonight, guided by these priorities, I
8:50want to organize our approach to
8:52economic statecraft under President
8:55Trump around five core principles.
8:59First
9:00is that economic security begins with
9:02national capacity. We have rediscovered
9:05at great cost what Alexander Hamilton
9:08taught us around the time of our
9:10founding, that every nation ought to
9:13endeavor to possess within itself all
9:16the essentials of national supply.
9:19That our strength, in other words, is
9:21derived from what we can build. For the
9:24nation that cannot produce what it needs
9:26is not truly secure.
9:28The nation that depends on its
9:29adversaries for critical input input
9:32puts
9:33>> [clears throat]
9:34>> is not truly sovereign. And the nation
9:36that reduces its economics to
9:38consumptions is not truly prosperous.
9:41Instead, as Hamilton put it, it is
9:44essential to enlarge the sphere of our
9:46domestic commerce because economic
9:49security begins at home. It begins with
9:51the capacity to build, invent, finance,
9:54and scale the industries that will
9:56define the next century. Among them,
9:59semiconductors, AI, quantum computing,
10:03advanced manufacturing, shipbuilding,
10:05critical minerals, and pharmaceuticals,
10:08to name only a few.
10:10More than sectors of the economy, these
10:12are sources of our national power, and
10:15America must lead in each of them.
10:18In today's economy, supply chains are
10:21the domain in which that leadership is
10:23tested. Yet for years, the question that
10:26seemed to consume both our political and
10:29commercial class was,
10:31"Where is the lowest cost?"
10:33That question is still matters, but it
10:36is no longer sufficient.
10:38We must also ask, "Can this supply chain
10:41survive a crisis? Can it withstand
10:43coercion? Can it continue operating
10:45during a pandemic, cyber attack, war, or
10:49financial shock? Does it depend on a
10:51country that could use economic leverage
10:53against us? Does it expose American
10:55firms to intellectual property theft?
10:58Does it leave our military, hospitals,
11:01energy system, or financial system
11:03vulnerable?" Of course, supply chain
11:06resilience does not require every
11:08component to be domestic from beginning
11:11to end. That would be unrealistic and
11:14unnecessary. But it does compel us to
11:16know where our vulnerabilities are and
11:19to reduce them before a crisis rears
11:22itself. It requires diversifying away
11:25from dangerous concentrations and that
11:27we build enough capacity at home to
11:30ensure that the American people are
11:32never at the mercy of a foreign choke
11:34point abroad.
11:36The second principle is that America's
11:38openness must be matched by reciprocity,
11:42which is the basis of doable durable
11:44cooperation. No economic relationship
11:47can remain healthy if one side opens its
11:51market while the other closes its own.
11:53No partnership can remain sustainable if
11:56American workers and firms are asked to
11:58absorb imbalances in the name of
12:00harmony. And no open system can survive
12:04if that openness is exploited by
12:06countries that do not practice it
12:08themselves. The United States remains
12:11the best economic partner in the world.
12:14To partner with us is to gain access to
12:17the deepest, most dynamic markets, the
12:20preeminent role of our dollar, and an
12:22ecosystem of innovation that has pushed
12:25the boundaries of the possible for two
12:27and a half centuries. Those benefits are
12:29substantial, but under President Trump,
12:33they are no longer unconditional.
12:35Countries cannot seek access to our
12:37market while denying fair access to
12:40theirs. They cannot invite American
12:42capital while imposing discriminatory
12:44taxes and investment obligations aimed
12:47at American companies. They cannot
12:49benefit from American security while
12:52adopting industrial policies that
12:54exclude American technology. They cannot
12:57ask American firms to invest, hire, and
13:00innovate, and then require those firms
13:02to localize intellectual property,
13:05transfer know-how, or satisfy indigenous
13:08innovation requirements designed to
13:10favor domestic champions. And they
13:13cannot participate in the dollar-based
13:15financial system while serving as
13:18conduits for the evasion of sanctions,
13:20illicit finance, or strategic leakage.
13:24America welcomes its partners, and we
13:26are stronger because of them. But, our
13:28partnership now carries expectations,
13:31and in some instances, non-negotiable
13:34obligations. Of course, we will continue
13:37to distinguish legitimate regulation
13:39from discrimination.
13:41Every sovereign nation has the right to
13:43regulate in ways that serve its own
13:46public interest. The United States
13:48respects that responsibility.
13:51But, regulation descends into
13:53discrimination when it targets American
13:55firms because they are American. Tax
13:58Taxation becomes retribution when it
14:01singles
14:02out via structure American companies,
14:06and industrial policy is welded wielded
14:10as a tool of exclusion when it uses
14:12local content rules, forced
14:14localization, procurement bias, or
14:16indigenous innovation requirements
14:19to shut American firms out of fair
14:22competition. These differences are not
14:25difficult to discern, and the United
14:26States possesses many tools at its
14:29disposal to remedy practices that
14:31distort trade and undermine reciprocity.
14:34We will always seek to use those tools
14:37judiciously, but we will never hesitate
14:40to use them decisively.
14:42The third principle is that America will
14:45write the rules of the next economy. Of
14:48course, unlike much of the last century,
14:50the next era of domestic competition
14:53will not be confined to the movement of
14:55goods across oceans and ports. It will
14:57be shaped by the platform systems and
15:00protocols through which commerce flows
15:02in the 21st century. In each of these
15:05domains, standards become strategy. For
15:08the nation that fails to help write the
15:10rules of the next economy, we're sooner
15:12or later answer to those that did. If
15:16authoritarian or mercantilist systems
15:18write those standards for their own
15:20advantage, the global economy will
15:23become more coercive and less favorable
15:26to American interests. If American our
15:28partners set open, secure, market-based
15:31standards, then the 21st century will
15:34tilt toward freedom and prosperity by
15:37rewarding innovation, protecting
15:39intellectual property, and ensuring that
15:42competition is not distorted by
15:44discrimination. That is the system
15:46America should champion and is the
15:48system that our partners have every
15:50reason to build together with us.
15:53I think, for example, of the new
15:54frontiers in financial technologies.
15:57Digital assets, stablecoins,
16:00tokenization, and new payment systems
16:02will help to shape the future of money.
16:05The United States should not consign
16:07itself to the sidelines while that
16:09future is built elsewhere. We should
16:11support innovation that strengthens the
16:13dollar, improves efficiency, expands
16:17access, and preserves the integrity of
16:19the financial system, and we should
16:21insist that new technology meet our
16:24standards for transparency, security,
16:26consumer protection, and law enforcement
16:29access.
16:30The fourth principle is that financial
16:33leadership is a central instrument of
16:36statecraft.
16:37And as Treasury Secretary, I see its
16:40workings every day. There is nothing
16:42accidental about the dollar's place in
16:44the world. Its broad usage reflects the
16:47depth of our markets, the strength of
16:49our rule of law, the credibility of our
16:52institutions, and the scale of our
16:54economy. Of course, that leadership role
16:57bestows enormous advantages, among them
17:00lower borrowing costs, deeper capital
17:02markets, enhanced sanctions
17:05capabilities, and great influence across
17:08the global system. But it also imposes
17:10obligations that we cannot ignore.
17:13Sanctions evasion, terrorist finance,
17:16proliferation finance, cybercrime,
17:19narcotics trafficking, and corruption
17:21all exploit weaknesses in the financial
17:24system. Treasury's job is to protect the
17:27integrity of the financial system by
17:28rooting out these abuses and to deploy
17:32this power with discipline. Sanctions
17:34must be targeted, enforceable, and
17:37connected to strategy. They must be
17:39paired with diplomacy, compliance,
17:42intelligence, and coordination with our
17:44partners.
17:46The fifth and most important principle
17:48is that economic statecraft, first and
17:51foremost, must serve the American
17:53people. The purpose of American economic
17:55statecraft is to connect national power
17:58with household prosperity.
18:01We need an economy in which working
18:02families are not merely consumers of
18:05what the world produces, but
18:07participants in what America builds. An
18:10economy in which no community is asked
18:13to accept permanent decline as the cost
18:16of global efficiency. An economy in
18:18which the gains of national strength are
18:20broadly shared beyond the boardrooms and
18:23trading floors to families and
18:25communities who sustain it.
18:27America's competitive advantage has
18:29never been confined to the bounty of our
18:31natural resources or the depth of our
18:34capital markets. It has always resided
18:36in the character and the capacity of our
18:38people, the entrepreneur with the
18:40temerity to turn an idea
18:43into an enterprise, the worker with the
18:45ability to master new trades and new
18:47technologies that didn't exist a decade
18:50ago, and the institutions that allow
18:52their freedom and confidence to
18:54flourish. The purpose of economic
18:56statecraft is to restore that
18:58confidence. It is to affirm to the
19:00American people that our openness and
19:02strength can go together, that
19:05partnership abroad can reinforce
19:07prosperity at home, that we can retain
19:09the a
19:11>> [clears throat]
19:11>> dynamic markets while defending the
19:14foundations of our national interest,
19:16then America can welcome investment and
19:18trade without accepting dependency or
19:21decline.
19:22So, what should the world expect from
19:24the United States? Our partners should
19:26expect clarity. They should expect a
19:29nation committed to strong alliances and
19:31productive economic relationship.
19:34A nation that welcomes fair competition,
19:37rewards investment, and believes in open
19:40commerce. But, they should also expect a
19:42nation that is now more aware of its
19:44interest and more prepared to protect
19:46them. A nation that insists on
19:49reciprocity, that shields its firm
19:52from discriminatory
19:54treatment, secures its critical supply
19:57chains, enforces sanctions, and combats
20:00illicit finance. A United States, in
20:02short, that will not allow economic
20:05policy to grow detached from national
20:07strategy.
20:08Our adversaries,
20:10meanwhile, should expect resolve.
20:13Attempts to weaponize supply chains,
20:16steal technology, evade sanctions,
20:19manipulate markets, or coerce our
20:21partners will not go unanswered. We will
20:24build resilience before crises occur. We
20:27will work with partners whenever
20:29possible, and we will act whenever
20:31necessary.
20:32Finally, the American people should
20:34expect that the Trump administration
20:37will continue to put their security and
20:39prosperity first. They should expect
20:41policy that rewards work, investment,
20:44production, and innovation. Leadership
20:47that understands how productive capacity
20:50is power. An economy whose success is
20:53measured not merely by what it produces,
20:56but by whom it lifts. These are not new
20:58ambitions. Indeed, they're amongst the
21:01most abiding ones we hold. So, as we
21:04approach a great national milestone, we
21:06would do well to remember that our
21:08founders left us more than a republic.
21:11They bequeathed a roadmap powerful
21:13enough to sustain it for two and a half
21:15centuries. Of course, our founders
21:18scarcely could have foreseen the world
21:21we inhabit today, the industries we have
21:23built, the technologies we have
21:25invented, the prosperity we have
21:27created, or the power that we have come
21:30to attain. But what they did understand
21:34was something more more enduring, that
21:36the fortunes of a nation are shaped by
21:38the energy of its people.
21:40That great insight has been the source
21:43of America's strength since its
21:44founding. It's what transformed a small
21:47republic on the edge of a continent into
21:50the most prosperous nation over the long
21:52sweep of human civilization.
21:55It now falls on us to preserve that
21:57inheritance, not by seeking a smaller
22:00role in the world, but a stronger
22:02foundation for our leadership, not by
22:05seeking conflict, but by insisting on
22:07fair competition, by ensuring that our
22:10openness serves to strengthen America
22:13and the partnerships we form are worthy
22:15of the name.
22:17Those are reasonable expectations for
22:18any nation. They are also necessary ones
22:22for the United States. We have been and
22:24will remain the most important economic
22:27partner in the world, but we are now a
22:29partner with higher standards and
22:31greater expectation.
22:33We are a partner that has regained
22:35knowledge of the value that we offer and
22:37the will, once again, to defend it.
22:40That is American statecraft in the 21st
22:42century,
22:43open to the world while anchored at
22:45home, confident in our strengths and
22:48clear-eyed about our interests, and
22:50committed, above all, to the security,
22:52prosperity, and freedom of our people
22:55for the next 250 years and well beyond.
22:58Thank you for inviting me here tonight.
23:07>> And now, welcome to the stage Brett
23:10Baier.
23:15>> [applause]
23:20[applause]
23:25>> Mr. Secretary, thank you for the time.
23:29It's great to be here at the Economic
23:30Club of New York
23:32and a pleasure to ask you some
23:33questions. You know, Bob had the bio
23:35intro, your home in Charleston, South
23:37Carolina,
23:39your time in finance and business, but
23:41as we approach the 250th for America
23:44here, the celebration of the Declaration
23:47of Independence, your family has a rich
23:49history that goes even beyond that.
23:52>> Uh we did.
23:53We just had our 350th anniversary in the
23:56state of South Carolina a couple years
23:58ago and my my family arrived very early
24:03and one of the things that motivated me
24:05to come out from behind my desk was
24:08our family had been very prosperous for
24:11300 years. My dad made some financial
24:14mistakes and I [clears throat] went from
24:17living in the biggest house in town to
24:18bussing tables when I was 9 years old.
24:21And the
24:22I'm determined that is not going to
24:24happen to the United States of America
24:26on the eve of our 250th anniversary.
24:29>> [applause]
24:30>> Um
24:32I want to talk about the economic
24:34mission, how you see the administration,
24:36the policies, but I want to talk first
24:38about the the breaking news and that is
24:41everybody's focused on this Iran deal,
24:43whether it's coming together, whether
24:45negotiations are working or not. As this
24:48is starting, the 60-day process, you've
24:51relieved the sanctions to enable Iran to
24:53sell oil.
24:55Critics of this deal would say, "You've
24:57lifted the maximum pressure before
25:00they've actually produced anything." How
25:03do you respond to that?
25:04>> Uh sure. And what I Brett, what I would
25:07urge you, everyone in this room, to
25:09think about uh is the the
25:13the misinformation that we see as a
25:14result, I think, of
25:16uh three or four things. One, the
25:19Iranians are masters of propaganda.
25:22Two, the Iranian negotiating team, if we
25:24think about the three sleeves of the
25:27Iranian government, the in {quotation
25:29marks} elected officials, the IRGC, and
25:33the clerics, the negotiating team is
25:35from the government, and they are
25:38playing to a hardline audience back in
25:42Tehran. So, um
25:44just like we have hardliners in our
25:46system, they have hardliners.
25:48Uh
25:49you know, another the is that nothing
25:52President Trump can do
25:54ever satisfies the media.
25:56Uh so, you know, I I would tell everyone
25:59sit back, let this process take place.
26:02It It is going to be a process. Uh what
26:06we have done, we have told the Iranians
26:10that we would like a big deal.
26:13The Iranians have never but because of
26:16uh I outlined it in my speech here last
26:18year,
26:19uh
26:20when I said that
26:22I would if I held the Iranian currency,
26:25I would get out because the currency is
26:27going to collapse. Lo and behold, by
26:28December, the largest bank in Iran
26:31collapsed because of our sanctions.
26:33Central Bank had to print money, and the
26:36they had massive inflation.
26:38Um
26:39so,
26:40we managed to you know, a year of
26:43maximum pressure, then there was epic
26:46fury.
26:47We had economic fury, where we took the
26:50sanctions up another level, and then we
26:53had the blockade.
26:55Uh we have enabled we have allowed them
26:58to uh
26:59we've unsanctioned their oil and then
27:02the Iranians were always selling their
27:04oil. They all were always selling it to
27:06the Chinese and uh you know at a
27:08discount. And what it what I would say
27:11is, you know, it is
27:13better for the world
27:15and worse for them if they are getting
27:18the the let's say it's the Brent rate
27:21$75 $76 today, the full rate,
27:25rather than where we were a few weeks
27:27ago at $115 and getting 80% of that.
27:31So, you know, and again, this is a very
27:34conditional performance-based
27:36negotiation and we are offering them
27:40carrots and then there are sticks.
27:42>> Well, to that point, I mean, have they
27:44performed up to this point to get that
27:46relief on this sanction?
27:48>> Uh uh again, uh
27:50that there there is nothing there that
27:53we have we have done the sanctions
27:56relief and you this is a general benefit
27:59to the the global market and you it it's
28:03not, you know,
28:05automatic tit-for-tat. This is going to
28:07be an arc of a negotiation and you we we
28:11have done this and the fact that they
28:14are at the table discussing their
28:16nuclear program has never been done
28:18before. That they are willing to discuss
28:21it, we have not seen.
28:23>> So, your message is listen look at what
28:25they do, not what comes out in
28:28X and social media from the IRGC and
28:31others.
28:31>> Yeah, ju- just like the I I IRGC or
28:34someone came out the other day and said
28:36oh the the the Strait of Hormuz is
28:38closed again and 30 ships went through
28:41that day.
28:42Like it's it it's one of those that for
28:45people in the markets is uh
28:48the narrative is one thing and the
28:50market's doing the other.
28:52>> There's a lot been written, said, uh
28:54books about President Trump. You see him
28:58almost every day.
29:00What is his management style and how do
29:02you describe it?
29:05>> The
29:06uh
29:07Well, well, fir- first of all, it's
29:08non-stop.
29:10But as ma- many of you have heard me say
29:13is uh
29:14probably over the past 15 or 16 months,
29:17one of my most frequent refrains have
29:19been uh "No, sir, you didn't wake me.
29:23I'm always awake at 1:51 on a Tuesday
29:25night."
29:27And look, uh
29:29President Trump is is high impact, high
29:32return, high performance, and he is
29:36juggling a myriad the of things and um
29:41uh he has a viewpoint and he pushes it
29:45and he is very good at pushing and
29:48pushing and then knowing when to pull
29:51back. I think he's put together a great
29:53team in terms of the cabinet, the White
29:57House staff, and he really the
30:01work sweats us in terms of what he
30:04expects.
30:05>> And what's your management style?
30:07Treasury secretaries operate
30:08differently. What's yours?
30:11>> Uh
30:12I I've
30:14been very fortunate to walk into a great
30:16building. The
30:18everyone had told me uh at Treasury
30:22it it's not like a typical DC
30:24department. It's just But the the the
30:26career staff is great. We have great
30:29politicals. People come in. Uh you know,
30:32you probably are not you know, fighting
30:35the establishment if you're at Treasury.
30:37The you you want to uh either domestic
30:40finance, terrorism finance, uh
30:42international finance make a difference.
30:45And my my style is to find
30:49very smart people and give them lots of
30:52room and to have a very iterative
30:55process that at the end of the day
31:00we only have 4 years.
31:02And what I what I've tried to do as I
31:04outlined in my speech here, as I
31:06outlined a year ago. You know, I
31:08outlined a year ago we wanted to do
31:09substantial financial deregulation
31:12and we have.
31:13Uh
31:14not not my numbers,
31:17uh but some outside consulting firms
31:20think that we've created 3 trillion
31:23of extra lending capacity in the
31:25regulated banking system. So, my style
31:28is to have
31:30that some very long-term
31:33objectives, which I think we're meeting.
31:35One was the maximum economic fury on
31:38Iran, to deregulate the banking system,
31:41get the one big beautiful bill done, and
31:44but try to It was the same thing I did
31:46in my private career, try to stick to
31:49the prize and the prize may not be
31:51immediate and not view as much, but the
31:54Washington news cycle is built
31:57within an hourly cycle, a daily cycle, a
31:59weekly cycle, and we try to ignore the
32:02cycle.
32:03>> Well, I fall in there, too, I'm sure.
32:05Um
32:06but today the president was in
32:07Pennsylvania, the swingiest of swing
32:09states, in a district that is a swing
32:12district. He was talking about the
32:14economy at a Mack Truck plant, uh
32:16talking about the big beautiful bill.
32:19Yet, when you ask people in any state,
32:22polls across the board say they see the
32:26economy underwater, that the numbers are
32:28not good as far as approval on the
32:29economy for the president.
32:32Why is that? And do you think it's going
32:35to turn around and when?
32:37>> Uh well, I I think one one thing we're
32:39not going to do is what the previous
32:41administration did was tell people they
32:43don't know what they're feeling. Because
32:46that
32:47you know, this idea this narrative that
32:51maybe some journalists who are covering
32:53this tonight who should be ashamed said,
32:55"Oh, it's a vibe session. The American
32:58people don't know how good they have
32:59it." Well, the American people got
33:00torched. There's 21.5%
33:03inflation
33:05that probably
33:06the the worst in 50 years and you know,
33:09a big drop in real wages. I I know Jason
33:12Furman's here tonight. He has an index
33:16that measured how working families
33:19bundle of goods and services
33:21in terms of groceries, rent,
33:24insurance, car payments, and
33:27they probably their inflation was
33:29probably 35%. So, look, people are still
33:34hurt from that. We had a price level
33:36change, which is very difficult to bring
33:39down, but what I can tell you is what I
33:43had very good luck in my private
33:45business was looking at
33:47the what's the sentiment versus what are
33:50people doing and right now we're still
33:52seeing consumer spend. We are seeing no
33:55back up in credit card delinquencies.
33:57So,
33:59we are working every day to try to bring
34:03the inflation back to target.
34:06More importantly, get up real wage
34:08growth in President Trump's first term,
34:11uh
34:12real wage growth for hourly workers did
34:14better than uh
34:17management. The bottom 50% of economic
34:20households did better than the top 10.
34:23And uh you know, what we've seen this
34:25time too from the one big beautiful
34:27bill, also known as a working families
34:29tax cut, was that it was a home run for
34:32working Americans because I am also in
34:35charge of the IRS and 44% of the returns
34:40we got this year
34:42took at least
34:43took advantage of at least no one of the
34:46no tax on tips, no tax on overtime uh
34:49reduced taxes only 80 only 15% of our
34:53seniors paid taxes on their social
34:55security and deductibility of auto
34:59interest for American cars. So, you
35:01know, we are pushing that and I I think
35:05that now that we are
35:08I believe on the other side of this
35:09conflict, gas prices will come back
35:11down, inflation will come back to target
35:14and the real wage gains
35:16we had seen real wage gains in every
35:18month of President Trump's presidency
35:20until April.
35:23>> You've heard the pundits say the reason
35:25we're in this negotiating deal is
35:27because we want to get you, the
35:30administration wants to get oil prices
35:32down in time before the midterms.
35:36>> Uh they're absolutely not in the the
35:39briefings with President Trump.
35:41>> [laughter]
35:41>> Yeah, because they they you know
35:43Right, again, not you, others want to
35:45have it both ways. Said, "Well,
35:47President Trump doesn't care
35:49about the inflation, it doesn't care
35:51about the American people, but he wants
35:53to get oil prices or gasoline prices
35:55down by the election." You can't have
35:56both.
35:58Right.
35:58>> If you were to characterize the overall
36:00mission economically of this
36:02administration
36:03in an elevator pitch, what is it? We
36:05listened to the speech, but what would
36:07you say?
36:07>> Well, a couple of things. One is to
36:10restore sovereignty. I I've been quoted
36:12many times as saying the only good thing
36:14about COVID was it was a beta test for
36:16what could happen if we were to get into
36:19a hot war
36:21with a
36:22another major nation. So, uh we are
36:26bringing back critical industries. We
36:29are deregulating and letting the economy
36:33go, and we are pushing innovation and
36:36economic freedom.
36:39>> Behind the scenes,
36:41um there have been reports that you get
36:43a little fiery.
36:46There's a new book out that suggests
36:48there's another incident. There was
36:50something with Bill Pulte. How What
36:52What's What's the behind the scenes with
36:54Scott Bossert and other members of the
36:57administration?
36:58>> Uh look, I um
37:01that I think I've been
37:03described as having a long fuse, but
37:05when the powder keg blows, you don't
37:07want to be near it.
37:08And um
37:10look, I I think it's important to make
37:12one's opinion known, but as I've said,
37:14too, it it's not unlike a sports team
37:18where you can have disagreements in the
37:21locker room, but when you get on the
37:22field, you want to do your best. And I I
37:25think we're all pulling together very
37:27well.
37:28>> What's something that we're not covering
37:29a lot of that you're proud of as far as
37:32your job up until now?
37:33>> Uh
37:34look, I I I think that
37:37what we've seen in terms of
37:40um
37:41the the the banking system, I I am a big
37:44proponent of small and community banks.
37:47I've met with hundreds of those bankers
37:49the in the past year. I think that
37:53I am proud to say that I am an economic
37:55historian, not an economist, and having
37:59having studied the patterns of
38:02financial traumas like we had in
38:06the '07, '08, '09,
38:08there's always an overreaction.
38:11And it is it's human nature, and we
38:16overreacted, and the financial
38:18straightjacket for our regulated
38:20institutions became much too tight. And
38:23you can see that. Like private credit is
38:26a regulatory arbitrage. And I think what
38:30will go probably unnoticed in the
38:32history books is through the financial
38:34deregulation that we are bringing
38:37lending back into the regulated
38:39financial system where we can oversee
38:42it, where if there is
38:46everyone, you know, was asking me about
38:48private credit and a downturn. And I
38:52think private credit is a great new
38:54innovation
38:56in terms of our US financial markets. I
38:59do think it was a regulatory arbitrage.
39:02But what always worried me about private
39:04credit was that
39:07you wouldn't be able to use private
39:09credit in a downturn to restart the
39:11economy. Whereas if we had a downturn
39:15the
39:16the the Fed chair and I would be able to
39:19use the regulated financial system
39:22through window guidance on supervision,
39:25through opening windows, through
39:28facilities to restart the economy. So I
39:31I think it will be reinvigorating
39:34or one thing that has gone unnoticed is
39:36reinvigorating from the GSIBs to
39:40community banks the regulated financial
39:43system.
39:43>> Two more quick things. You mentioned the
39:45Fed chair, there is a new Fed chair,
39:47Kevin Warsh.
39:48Uh rate stayed the same this past time.
39:51Uh the president
39:53has been very vocal that he'd like to
39:54see interest rates come down. In this
39:57environment, where things stand now, do
39:59you think that there is increasing
40:01pressure on Fed chair Warsh to drop
40:04rates, uh
40:05even though it might not be possible?
40:07>> Uh I I am confident that the Fed chair
40:10will
40:11the optimize the path for both inflation
40:14and economic growth. And the the
40:16president said that at the Chair Warsh's
40:20swearing in that he would be
40:22independent, that he should do what he
40:24wants, and look, the the president
40:26understands, he and I have talked about
40:28it quite a bit, that howitzers have
40:30taken out more governments, or excuse
40:33me, the bond market has taken out more
40:34governments than howitzers.
40:36So, um
40:38I believe that he has complete
40:41confidence in the Fed chair to do the
40:43right thing.
40:44>> Last thing, the Trump accounts.
40:47Um this is something that I don't think
40:49a lot of folks fully have appreciated or
40:52taken advantage of. Is that fair?
40:54>> I I I think both. I think the pre-
40:58president's going to have a long-lasting
40:59legacy, but I think we will look back in
41:0220, 30, 40, 50 years, uh some of us will
41:05be here in 50 years, uh for the 300th,
41:08that uh we will look back and think that
41:11this is the most important benefit for
41:13young people since the GI Bill.
41:15That I I um our family have been big
41:18advocates for financial literacy.
41:20Uh 38%
41:22of American households have no exposure
41:25to our great equity markets. They do not
41:28participate in the innovation. They do
41:30not participate in the American capital
41:34markets, and this, I believe, is a
41:37substantial and necessary step toward
41:39changing that. So, it is
41:42um
41:44parents can open the accounts for
41:45children uh from newborns to age 18.
41:49Children born during President Trump's
41:51term will receive an initial $1,000 seed
41:54investment that will be put into a
41:56low-cost index fund. Uh they will go
41:59live July 4th, which is Saturday, so
42:01it'll be July 6th. But,
42:04that for children not born during this
42:07administration, parents can add up to
42:09$5,000 a year, employers can add $5,000,
42:13but foundations, states are going to add
42:17uh some great philanthropists, Michael
42:19and Susan Dell have contributed $6.25
42:24billion. Uh when Michael announced it,
42:27the president said, "Michael, 250
42:29million's a lot. 6.25's really a lot."
42:32And they have done a bespoke program
42:36where uh their money will go to uh
42:40families that are in who are not in the
42:42top 20% income zip codes.
42:45And that is going to work out to about
42:47$250 per child.
42:49Uh Ray Dalio from Bridgewater has
42:51adopted Connecticut. Uh
42:54Brad Gerstner adopted his home state of
42:56Indiana. Harold Hamm has done uh
42:59Oklahoma. So, there's going to be a a
43:02lot added to this, but I I think more
43:05importantly, it is going to be a
43:07real-time experiment in financial
43:09literacy. That many of these families
43:11that have never uh
43:14thought about the stock market, uh
43:16looked at things like this, it's going
43:18to be on the phone every day, going to
43:20be become a topic at the dinner table,
43:22like I'm sure no one in this room brings
43:24their work home.
43:26And but I I I do think that this is
43:30has the potential to change uh the
43:32course of these young people, but also
43:35to change the discourse on you know,
43:38it's primary day here in New York. And
43:41because of the Hatch Act, I'm not
43:43allowed to comment
43:44on which uh candidates I'm pulling for,
43:46but I would think that with programs
43:49like this, that the socialist
43:51alternative would be less appealing.
43:53>> But they have to sign up in order to
43:55take advantage.
43:56>> they they've got it they've got to sign
43:57up. We We've got about 6 million
43:59sign-ups so far, but they that's only
44:03about 10% or less. going
44:05>> it to Bob for the dais questions, but
44:07finally,
44:09what keeps you up at night?
44:11>> Uh
44:13the president.
44:14>> [laughter]
44:19[applause]
44:20>> The
44:21the
44:22the 4 years seems like a long time, and
44:25some days it seems like a long time, but
44:28really that we we've only got 4 years.
44:31There's so much to do, the whether it's
44:35in regulation, deregulation,
44:37uh competition, reshoring manufacturing,
44:41um
44:42and you know, I I have two children,
44:45leav- leaving the country in much better
44:47shape, and you know, I I think that this
44:51the 250th anniversary, I remember the
44:54bicentennial. You know, I was
44:5712.
44:58And you know, I I think that this is a
45:00great time to reflect, but you know, I
45:03just I lie awake at night thinking of
45:05all the things that we need to do during
45:07our 4 years, and hope that whether it's
45:10Republican or Democratic administration,
45:13that many of these good policies can be
45:15carried on.
45:16>> Mr. Secretary, thanks for the time.
45:18I'll hand it to Bob.
45:21>> [applause]
45:29>> The program, Secretary Ross has spoken
45:31with us in formal remarks, and then
45:33dealt with questions from Mr. Baer, and
45:36now we're going to have questions from
45:37the dais. Uh we have four able
45:39questioners today, all of whom are
45:41trustees of the Economic Club of New
45:43York. We're going to have Den B Samuoya,
45:46chair elect of your club, co-principal
45:48of Versaka Investments, Arvind Krishna,
45:51a vice chair of our club, and chair and
45:53president and CEO of IBM. We're going to
45:56have Devon Parekh, managing partner of
45:58Insight Venture Partners, and Charles
46:00Phillips, co-founder of Recognize. So,
46:03that's the run of show. Dan Bissa, over
46:06to you for the first question.
46:08>> Thank you very much, Mr. Chairman, and
46:10thank you, uh Secretary of the Treasury.
46:13Um this year marks the 250th anniversary
46:16of the United States, but it is also the
46:18250th anniversary of the publication of
46:21Adam Smith's seminal tome, The Wealth of
46:24Nations. How do you think Adam Smith's
46:26insights should influence economic
46:29policy today?
46:31>> I I I think that if Adam Smith were to
46:34look at the United States of America, he
46:36would be astounded. And it would have
46:39proven how prescient he was in in terms
46:42of the free spirit and ability for
46:47the people
46:49given the opportunity to conduct
46:51commerce the
46:53in a
46:55unregulated way,
46:57and the things that could be created. I
46:59I think in a way the United States they
47:02could would be the
47:05almost unimaginable to him how prescient
47:08he had been.
47:09And I I would also point out that he
47:13they wanted free peoples, but he did
47:16often talk about the navigation act,
47:19which said that
47:21not all things are completely free,
47:24especially in the matters of defense.
47:26And I think he would actually admire
47:28what this administration is doing in
47:30terms of reclaiming our sovereignty.
47:32>> Great. Thank you very much.
47:34Arvin, over to you.
47:35>> Thank you.
47:37Secretary Bessen, first, thank you for
47:38your comments.
47:39One of the topics you mentioned was
47:41artificial intelligence or AI.
47:44There's a lot of excitement on the
47:45topic,
47:47a little bit of trepidation in some
47:48corners.
47:50Would you comment on your views on the
47:52economic growth that AI could bring us,
47:55and
47:56your views on regulating AI.
47:59>> Well, I I think we're already seeing the
48:01economic growth that it could bring us.
48:03I think a lot of people in this room
48:05would know that every $300 billion is 1%
48:08of GDP.
48:10And we are seeing that the hyperscalers
48:13are going to spend at least $750 billion
48:17this year. Obviously, a lot of that's
48:19imports, so it won't go directly into
48:21GDP, but
48:23we we are seeing the here and now,
48:25whether it's in the construction jobs,
48:28the in the capital markets, the the
48:30things that are happening. And I I think
48:33that
48:35we all just have to have an open mind in
48:37terms of where this can take us.
48:39But,
48:40I I remember the
48:43boom what was the internet boom or the
48:46office modernization
48:48technology boom in the '90s that added
48:50about
48:52for for those of you who are I'm sure
48:55like I did read Alan Greenspan's
48:57obituaries the over the past uh
49:01few days,
49:03he was correct that
49:06that techno technological boom
49:09roughly doubled productivity from 1 and
49:121/2 to 3. Uh you know, could we do at
49:15least that? Can we do maybe more?
49:17And in terms of the regulation, it is
49:20something that I think about every day
49:23at Treasury because of AI, the financial
49:27system, and our responsibility and our
49:29responsibility of guiding the American
49:31economy,
49:32we think about the implications and we
49:35are trying to optimize a very difficult
49:39calculus in terms of innovation and
49:41safety to get the proper equilibrium to
49:44make sure that we can maintain our lead
49:48because I I will tell you President
49:50Trump asked me to give some some remarks
49:52in Evian, France last week to the G7
49:55leaders about AI and many many of them
49:59had talked about
50:01AI
50:03risk, the risk to safety, the risk to
50:06employment and I think they were
50:08slightly stunned when I said the biggest
50:10risk
50:11to AI is China getting ahead of us.
50:14that
50:16>> [applause]
50:18>> So, I I
50:20that I I am one of the point people on
50:22our AI policy. I am the point person in
50:26terms of the economic relationship with
50:29China and I can tell you that the reason
50:32the Chinese are willing to have a
50:34discussion on AI is because we are
50:36ahead. So, we have to stay ahead.
50:39Thank you.
50:40>> [applause]
50:42>> Devon, over to you.
50:44Uh thank you, Secretary Mnuchin, for
50:45your comments. There seems to be a
50:47tension between the desire for weaker
50:50dollar to support manufacturing on one
50:51hand and the need for dollar strength to
50:54maintain reserve currency status and
50:56fund the deficit cheaply. How do you
50:58think about managing
50:59that contradiction?
51:01>> Yeah, I I I don't think it's necessarily
51:03a contradiction because you know, I I
51:06remember when Germany was an industrial
51:08powerhouse, they did it with a strong
51:10currency. And that the the strong
51:13Deutsche Mark constantly made them
51:16become more efficient, made them
51:18innovate, made them they up their
51:20production game. And you know, if if I
51:23think
51:24I'm not sure where we are now.
51:27Um
51:28I I might say it's 6.7% change in the
51:31dollar since last year, but I'm not
51:32looking at it.
51:34>> [laughter]
51:35>> And
51:36I don't think that that
51:38I don't wake up and think great, it
51:40helped the economy. I just think that
51:42it's a price on the screen and that what
51:45we are really looking for
51:49when people talk about a strong dollar,
51:51I don't think it is the Bloomberg Dollar
51:53Index. I think that it means that we are
51:56doing the things to give us the
51:58underpinnings that people want to come
52:00to this country, whether it is tax
52:02certainty, regulatory certainty, energy
52:05certainty. And I I don't necessarily
52:07believe that there is a the a duality
52:12there in a strong dollar and a
52:15manufacturing economy. I I think that we
52:19can pull away in the manufacturing
52:21economy. Now, on the other side
52:24that I I do think, especially in a lot
52:26of low-cost manufacturing,
52:28that you can see a suppressed currency
52:32uh
52:32work against us. So, you know, I I often
52:36think it's not necessarily a strong
52:38dollar. It may be
52:41you know, I'll pick on Southeast Asia
52:42because they manage their currencies the
52:44most. It may just be a weak currency
52:47elsewhere.
52:49>> Perfect. Thank you. And
52:51the last question, please, Charles. Over
52:53to you.
52:54>> Thanks. Uh Mr. Secretary, thanks for
52:56being here at this Economic Club event.
52:59My question has to do with housing.
53:01Annual home sales in the US reached
53:03about 6 million in 2021 and now we're
53:05kind of stuck at 4 million a year. It
53:08seems to be a lot of rate lock-in that
53:10people [clears throat] just can't sell
53:11their homes without having a low
53:12mortgage rate and if they sell it, they
53:14get a higher one. So, is housing
53:16affordability fundamentally a rate
53:18problem that you can influence or is it
53:20a supply problem that you can? And if
53:22rates do fall, doesn't that just, you
53:24know, pent-up demand reinflate prices
53:26anyway? And then lastly, I think the
53:28Senate just passed a bill yesterday
53:29addressing some of this. The housing is
53:32the house is considering it right now.
53:33Is there anything there, any unlock
53:35there that you need to talk about? It'd
53:36be helpful to get your view.
53:38>> Good. Well, fir- first of all, I want to
53:39thank you for not ask- asking me a
53:41technology question that I couldn't
53:42answer.
53:43>> [laughter]
53:44>> So.
53:45Uh and that Look, this this housing, to
53:49to quote the the maestro, is a
53:51is a conundrum.
53:53And it's this equilibrium that it is We
53:56we haven't really seen it before, and a
53:58lot of it has to do with the rate locks
54:00that we saw during the very
54:02low interest rate environment, whether
54:04it was in the teens or especially
54:07in COVID, because as rates have gone up,
54:11house prices
54:13have stayed flat to slightly
54:16appreciated. It is
54:19We we need a
54:21It will help when rates come down.
54:23Before the Iran conflict, rate mortgages
54:26briefly went below 6%, and we saw
54:30a an uptick in mortgage applications. It
54:33seems that there's something magic
54:36and psychological about that number, but
54:39you're right. We We have to have a
54:41supply solution. At the federal level,
54:44we have no ability to regulate that. Uh
54:47we do have the ability to give guidance,
54:50to push
54:52localities, states. I think uh
54:55something that will be important is um
55:00uh changing the the nature of uh prefab
55:03housing, manufactured housing. Uh the
55:05technology in housing,
55:07some of it goes back to a lot of the
55:10regulations go back to the Chicago fire.
55:12Uh there've been no advances in housing
55:15technology in 50 or 100 years, and um
55:19you know, we are hoping to be able to
55:21put out an all-of-government approach to
55:23try to standardize
55:25uh not zoning standards
55:27by municipality, but building standards.
55:31Look, the where where I live, you know,
55:34Chevy Chase has different building
55:35standards in Bethesda than McLean than
55:38Silver Springs. So, So, you know, there
55:40there's some
55:42the economies there to the extent things
55:45can come out of the factory more
55:48standardized. And then with the housing
55:50bill
55:51I I do think that taking institutional
55:54buyers out a lot of what we hear is
55:56well, they weren't that big, but
55:58everyone in this room knows that markets
56:00are made on the margin. So, a a 3%
56:04non-economic buyer
56:06could be very different in boom markets
56:09like Atlanta,
56:11South Carolina, Alabama, Texas.
56:14Some of the
56:15larger aggregators might be buying up to
56:1915 or 20% of the markets. And for for
56:22those who who are free market purists,
56:24it is not a free market because there is
56:25a tax arbitrage between investors buying
56:29housing who can depreciate the the
56:31buildings and a residential buyer. So,
56:35uh
56:35it it it is a tough problem and it is
56:39going to take lower rates and more
56:40supply.
56:42>> Great. Um first of all, Devin, Arvin, um
56:46Dambisa, Charles, thank you for your
56:47questions. And let's just take a second
56:50and think what a wonderful job the
56:52secretary's done this evening delivering
56:54us remarks.
56:55>> [applause]
57:05[applause]

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