Bessent on Tariffs, Deficits and Embracing Trump’s Economic Plan - Bloomberg
https://www.bloomberg.com/news/features/2025-08-11/treasury-secretary-bessent-on-tariffs-deficits-trump-s-economic-plan
After a 40-year career in finance that involved working for investing legends such as George Soros and Stanley Druckenmiller, Bessent has his own ideas about how to soothe panicky traders. “I think I could have made the markets go up on Liberation Day,” he says in a late-July interview in his office at the Treasury Department. “If we had said, ‘Here are the numbers. These are the maximum tariff levels if you don’t retaliate, but we’re open for negotiation.’”
On Air Force One that Sunday in April, Bessent says, he proposed an immediate tariff pullback to defuse the crisis. But the president was undeterred. He wanted to scare America’s trading partners to the bargaining table. “Let’s let it run a couple more days,” he told Bessent. “Do not say we’re willing to negotiate.”
It wasn’t until a few hours before the levies were supposed to kick in that Trump finally relented. On Wednesday, April 9, he announced a 90-day pause on so-called reciprocal tariffs and a 10% interim rate for every country but China. Speaking to reporters outside the White House, Bessent praised the president’s “great courage” for staying the course. Stocks roared back.
The story everyone on Wall Street wants to believe is that Bessent, one of their own, persuaded a reluctant Trump to capitulate on tariffs after friends with billions of dollars at risk called him to complain. That’s the thinking behind the now-infamous acronym coined by a Financial Times columnist—TACO, for “Trump always chickens out.” Bessent insists that’s wrong. “The market did not force him,” he says. “He has a higher risk tolerance than I do.”
The episode sheds light on how decisions are being made in Trump’s second administration. Many on Wall Street and elsewhere see Bessent as a moderating influence, someone who can pull Trump back from the brink, at least on economic matters. Yet during a lengthy interview, he repeatedly downplayed his role, casting himself as a humble counselor whose job is to help the president channel his populist impulses into policies—then translate those for markets. “I do my job, give him options and outcomes, present and then manage the narrative from there,” he says.
That might come across as unduly modest for someone as respected as Bessent, but it’s a tried-and-true strategy. “Whether you’re negotiating at the G-20, you’re negotiating a trade deal or you’re negotiating with Congress, you’d better understand that you’re speaking on behalf of the president,” says Steven Mnuchin, who was Trump’s Treasury secretary from 2017 to 2021. “If you’re not doing what the president wants and you can’t represent him well, the role has no power.”
In less than seven months on the job, Bessent, a 62-year-old South Carolinian, has shown he can calm financial markets as the de-escalationist in a trigger-happy administration. Rightly or wrongly, he gets credit not only for Trump’s decision to back down on the Liberation Day tariffs but also for persuading the president not to follow through (so far) on his oft-repeated threat to fire Federal Reserve Chair Jerome Powell. At the same time, he’s largely escaped scrutiny for failing to deliver on his pledge that the administration would be “laser-focused” on cutting the budget deficit and driving down bond yields.
Even on matters that have alarmed former peers in the investment business, Bessent has firmly backed the president. One such occurrence played out on Aug. 1 when Trump, furious at a report showing a sharp slowdown in hiring, suddenly fired one of the country’s top officials responsible for economic data and accused her of manipulating the jobs numbers. That immediately threw into question the integrity of future statistics and with it the empirical foundation that underpins not only Federal Reserve interest-rate decisions but also the entire $29 trillion US Treasury bond market. Bessent, speaking later to MSNBC, said Trump’s decision was warranted by the frequency of huge revisions to employment figures and that a change was “overdue.”
조지 소로스, 스탠리 드러켄밀러 같은 투자계의 전설들과 함께 40년간 금융 경력을 쌓아온 베센트는 공황에 빠진 트레이더들을 진정시키는 자신만의 아이디어를 가지고 있습니다. 7월 말 재무부 사무실에서 가진 인터뷰에서 그는 "해방의 날에 시장을 상승시킬 수 있었을 것 같다"고 말합니다. "만약 우리가 '여기에 수치가 있습니다. 보복하지 않는다면 이것이 최대 관세 수준이지만, 우리는 협상에 열려 있습니다'라고 말했다면 말입니다."
베센트는 4월 그 일요일 에어포스원(대통령 전용기)에서 위기를 해소하기 위해 즉각적인 관세 철회를 제안했다고 말합니다. 그러나 대통령은 흔들리지 않았습니다. 그는 미국의 교역 상대국들을 협상 테이블로 끌어들이기를 원했습니다. 그는 베센트에게 "며칠 더 지켜보자"며 "우리는 협상할 의사가 있다고 말하지 말라"고 했습니다.
트럼프는 관세 부과가 예정되어 있던 수요일, 4월 9일이 되어서야 마침내 물러섰습니다. 그는 중국을 제외한 모든 국가에 대해 소위 호혜 관세(reciprocal tariffs)를 90일간 유예하고 10%의 임시 세율을 적용한다고 발표했습니다. 백악관 밖에서 기자들에게 연설하면서 베센트는 트럼프가 그 방침을 고수한 것에 대해 "큰 용기"를 칭찬했습니다. 주식 시장은 급등했습니다.
월스트리트의 모두가 믿고 싶어 하는 이야기는, 수십억 달러의 자산이 위험에 처한 친구들의 불만 전화를 받은 베센트가 마지못해 트럼프를 설득해 관세를 철회하게 했다는 것입니다. '트럼프는 늘 겁먹고 물러선다(Trump always chickens out)'는 악명 높은 약어인 'TACO'를 한 파이낸셜 타임즈 칼럼니스트가 만들어낸 배경에는 이러한 생각이 있습니다. 베센트는 그것이 잘못된 생각이라고 주장합니다. "시장이 그를 강요한 것이 아니다"라며 "그는 나보다 위험 감수성이 높다"고 말합니다.
이 사건은 트럼프 2기 행정부에서 의사 결정이 어떻게 이루어지는지에 대한 통찰을 제공합니다. 월스트리트와 다른 많은 사람들은 베센트를 완화적인 영향력을 가진 인물, 즉 적어도 경제 문제에 있어서는 트럼프를 벼랑 끝에서 끌어내릴 수 있는 인물로 보고 있습니다. 그러나 긴 인터뷰 동안 그는 자신의 역할을 반복적으로 축소하면서, 자신의 역할이 대통령의 포퓰리즘적 충동을 정책으로 전환하도록 돕고, 그것을 시장에 전달하는 겸손한 조언자라고 말했습니다. 그는 "나는 내 일을 하고, 그에게 선택지와 결과들을 제시하고, 그 다음 그곳에서부터 서사를 관리한다"고 말합니다.
이는 베센트처럼 존경받는 인물에게는 지나치게 겸손하게 들릴 수 있지만, 이는 오래되고 검증된 전략입니다. 2017년부터 2021년까지 트럼프의 재무장관이었던 스티븐 므누신은 "G20에서 협상하든, 무역 협상을 하든, 의회와 협상하든, 당신이 대통령을 대신해 말하고 있다는 것을 이해해야 한다"고 말합니다. "만약 당신이 대통령이 원하는 것을 하지 못하고 그를 잘 대변할 수 없다면, 그 역할은 아무런 힘이 없다"고 그는 덧붙였습니다.
62세의 사우스캐롤라이나 출신인 베센트는 취임한 지 7개월도 안 되어, 총기 난사하듯 정책을 펼치는 행정부에서 '긴장 완화주의자'로서 금융 시장을 진정시킬 수 있음을 보여주었습니다. 옳든 그르든, 그는 '해방의 날' 관세에 대한 트럼프의 철회 결정뿐만 아니라, 트럼프가 자주 반복해왔던 제롬 파월 연방준비제도 의장을 해고하겠다는 위협을 (아직까지는) 실행에 옮기지 않도록 설득한 것에 대해 인정을 받고 있습니다. 동시에, 그는 행정부가 예산 적자 삭감과 국채 수익률 하락에 "매우 집중할 것"이라는 자신의 공약을 이행하지 못한 것에 대한 비판을 대체로 피해 왔습니다.
투자 업계의 옛 동료들을 놀라게 한 문제에 대해서도 베센트는 대통령을 단호히 지지했습니다. 그러한 사례 중 하나는 8월 1일에 일어났는데, 트럼프가 급격한 고용 둔화를 보여주는 보고서에 격분하여 경제 데이터 책임자 중 한 명을 갑작스럽게 해고하고 그녀가 고용 수치를 조작했다고 비난한 것입니다. 이는 즉시 미래 통계의 무결성에 의문을 던졌고, 그와 함께 연준의 금리 결정뿐만 아니라 전체 29조 달러 규모의 미국 국채 시장을 지탱하는 경험적 토대까지 흔들었습니다. 베센트는 이후 MSNBC와의 인터뷰에서 트럼프의 결정은 고용 수치에 대한 빈번한 대규모 수정으로 인해 정당화되며, 변화가 "오래전에 있었어야 할 일"이라고 말했습니다.
In conversation, Bessent was clearly pleased that, despite dire warnings from the establishment that Trump’s disdain for diplomatic norms and indifference toward the rule of law would destroy the economy, the S&P 500 index had advanced 10% since the Nov. 5 election. But stocks have given up some of those gains in recent weeks, as evidence of a slowdown piled up. The July employment report showed the weakest three months of job growth since the pandemic. In the meantime, a softening in consumer spending since the beginning of the year suggests tariffs are beginning to bite.
The Treasury secretary is sometimes described as the country’s chief financial officer, but whether by dint of ambition or circumstance, or a combination of the two, Bessent’s responsibilities go far beyond the usual job description. In addition to handling the standard portfolio—debt issuance, tax collection, Social Security payments, financial regulation, foreign-investment screening, economic sanctions—Bessent has been tapped to take on some of the most difficult and high-profile assignments of Trump 2.0.
He’s taken the lead in trade talks with China, Japan and other Asian nations, resulting in four bilateral pacts to date. Bessent also crafted the April deal giving the US an economic interest in Ukraine’s mineral and energy reserves. Another item Trump put on his to-do list: Review the government’s student loan portfolio, which at $1.7 trillion constitutes the single biggest asset on the US balance sheet.
When Trump’s signature piece of domestic legislation—the One Big Beautiful Bill Act—ran into obstacles in Congress, Bessent was instrumental in clearing the way, first by negotiating a compromise with senators on tax relief for high-cost-of-living districts and then by persuading holdout Republicans in the House of Representatives to accept a phaseout schedule for clean energy tax credits. In interviews he dismissed accusations that the party indulged in accounting gimmickry that overstates the bill’s economic benefits while grossly underestimating its impact on the federal debt. He also resolved an international standoff on corporate taxes: Under an agreement with Group of Seven finance ministers, US companies will be exempted from a global minimum tax on multinationals. And while he says he has no interest in succeeding Powell, Trump’s whipping boy and first-term appointee, Bessent is running the process to find a new Fed chair. “I’m impressed by how well he’s navigated the political environment,” says Druckenmiller, whom Bessent used to talk to daily when he was running his hedge fund.
Bessent likes to call himself the nation’s “top bond salesman,” evoking the image of a stern-faced man with a green eyeshade going over coupon payments in a stuffy office. But in practice, the 100,000-employee Treasury under his watch has turned into a Department of Everything where, on any given day, trade deals are being negotiated, fiscal policy is being crafted, and national security is being fortified. Bessent is even serving as acting commissioner of the Internal Revenue Service. All of this gives him enormous sway over the US economy and reveals that, in practice, his role goes far beyond that of sounding board for the president.
Born in Conway, South Carolina, to a prominent family whose ancestral roots in America trace back to 17th century French Huguenots, Bessent was the eldest of three children. His father, Homer, was the founder of a real estate firm along the state’s coastal Grand Strand and a pillar of local civic life. Bessent initially hoped to attend the US Naval Academy and was offered an appointment by his local congressman. But he turned it down, he says, because as a gay man he faced the risk of being court-martialed. Instead he enrolled at Yale University, where he majored in political science.
On the surface, Bessent’s old-stock pedigree made him a perfect fit at preppy early-1980s Yale. Except the family business had fallen into bankruptcy. “We came from extreme privilege, and my father lost it all,” he says. While fellow students could afford fancy cars and clothing—Mnuchin’s father was a partner at Goldman Sachs—Bessent had to earn a scholarship and worked part-time jobs.
Bessent had hopes of going into journalism, but, after running for editor of the Yale Daily News and losing, he answered a campus listing for an internship in the family office of Jim Rogers. A Yale graduate who started the Quantum Fund in 1973 with Soros, Rogers had recently retired to manage his own money and tour the world on his motorcycle. He hired Bessent for a summer internship and let him sleep on a sofa at his office in New York. Bessent found the work appealing and went on to full-time jobs at Brown Brothers Harriman, a brokerage; the Olayan Group, a Saudi family-owned business; and Kynikos Associates, an investment firm founded by another Yalie, Jim Chanos. In August 1991 he joined Soros Fund Management (SFM) in New York.
The hedge fund industry was still relatively new, and Soros wasn’t yet a Wall Street legend. Bessent, 29 at the time, impressed Druckenmiller, then the firm’s chief investment officer, who found him intellectually curious and especially liked that he’d learned to short stocks while working for Chanos. “He had a big brain and a great work ethic,” Druckenmiller says.
Within months, Druckenmiller dispatched him to London, where, after studying the UK housing market, Bessent reported back that many borrowers could barely make mortgage payments. Thanks to Bessent, Druckenmiller realized that the Bank of England couldn’t raise interest rates very far without triggering a wave of homeowner defaults and catastrophe for the economy.
Druckenmiller and Soros went on the attack, shorting the British pound so relentlessly that on Sept. 16, 1992, a day later dubbed “Black Wednesday,” the UK had no choice but to devalue its currency. The trade netted Soros a then-unheard-of profit of more than $1 billion and the sobriquet “the man who broke the Bank of England.”
One early sign of Wall Street’s confidence in Bessent came in 2000, when he left SFM to start his own firm. Bessent Capital Management was, at the time, the biggest-ever hedge fund launch, raising $1 billion from clients including Soros himself. There, Bessent honed the skills and style that distinguished him from fellow “macro” managers—investors who translate their insights about how the global economy works into wagers on the bond, stock, currency and commodity markets.
While Druckenmiller, his mentor, was more of a trader by nature, Bessent immersed himself in the mechanics of policymaking. “He had a clear understanding of how central banks operate and take decisions,” says Davide Serra, who first met Bessent in 1998 while working as an analyst at what was then UBS Warburg. “Other people in macro were focused on real-world events. He saw opportunity in the clash between theory and practice.”
Serra, who founded London-based Algebris Investments, stayed in touch with Bessent, making a point of seeing him every time he traveled to New York. While their conversations were mostly about economic policy and investing, he recalls many instances when Bessent expressed views that, in retrospect, are Trump-compliant. He wanted China kicked out of the World Trade Organization, he complained that Europe wasn’t spending enough on defense, and he worried that the US had lost so much potential for social mobility that an 18-year-old today wouldn’t have the same chances he’d had.
By 2005, after some of Bessent Capital’s strategies lost money, he converted the fund to a family office and gave his investors their capital back. He returned to Yale as an adjunct professor, while moonlighting as a hedge fund adviser. Bessent might have stayed at his alma mater had Soros not needed his services again. In 2011 he accepted the role of chief investment officer with responsibility for SFM’s entire $25 billion portfolio.
SFM employees remember Bessent as a brilliant risk manager with a knack for sidestepping disaster. In 2014, for example, he turned down a request to bankroll a bet against the Swiss franc. Soon thereafter, Switzerland scrapped its currency peg to the euro, causing the franc to soar and forcing the firm that had proposed the position, ...
