On Sunday, Treasury Secretary Scott Bessent spoke to CNN's Jake Tapper about President Trump's tariff policies.
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00:00Trump went on Truth Social and says Walmart should eat the tariffs, in other words,
00:04not pass on the prices to consumers. Doesn't that inherently serve as an acknowledgement
00:14that tariffs are essentially a tax on consumers? Because initially President Trump said, well,
00:21other countries, you know, that's not true. Countries pay for the tariffs. But here we
00:25have a perfect example. The countries, China gets these tariffs and then Walmart has to raise its
00:32prices and consumers end up paying for them. Well, Jake, in essence, what you're saying is
00:37you're saying taxes are inflationary. So let's pass the Trump tax cuts and that'll be disinflationary
00:43if we continue that line of thinking. I know that you can put me on as endorsing anything,
00:48but go ahead. Well, let's just keep everything consistent. I did speak to Doug McMillan,
00:55who I have a very good relationship yesterday, just to understand what he had to say. And,
01:01you know, understand that came from an earnings call. On an earnings call, because of SEC
01:06requirements, they have to give the most draconian case. So Walmart will be absorbing some of the
01:12tariffs. Some may get passed on to consumers. But the other thing that's happening is that
01:17inflation is down. We had the first drop in inflation in four years under President Trump.
01:24The other thing that Doug mentioned to me is for his consumers, for his buyers,
01:29the most important thing are gasoline prices. And this administration has gotten gasoline prices down.
01:35Service prices are down. So overall, I would expect inflation to remain in line. But I don't blame
01:42consumers for being skittish after what happened to him four years under Biden. We had the worst
01:48inflation in 40 years. So ever since Liberation Day, April 2nd, I have a weekday show called The Lead.
01:54And ever since then, every day, pretty much, we interview a small business owner. Some of them
01:59are Trump supporters. Some of them are not. Some of them are tariff supporters. Some of them are not.
02:03The one thing I hear from almost every one of them is the uncertainty. They don't know how to plan
02:11for the future because they have no idea what's going to come. The other thing I hear is that their
02:17margins – these are small, small business – their margins are so thin, 5% to 10% max. And they say
02:25that these tariffs are just taking away all of their profit margin. So I guess my question is,
02:32what do you say to people concerned about the uncertainty? And what do you say to people
02:36who say – small business owners who say, we need relief? Because they say, like, I'd love to buy
02:42lithium batteries in the United States, but you can't. They're only available for small businesses
02:47from China. Well, a couple of things to unpack there, Jake. One is that we didn't get here
02:55overnight in terms of this terrible trade situation we have with China, but also with the rest of the
03:01world. And President Trump is renegotiating these. And strategic uncertainty is a negotiating tactic.
03:11So if we were to give too much certainty to the other countries, then they would play us in the
03:19negotiations. I am confident that at the ends of these negotiations, both the retailers,
03:26the American people, and the American workers will be better off. That what we saw with China,
03:33China was the only country post-April 2nd to escalate. So both sides escalated. We got to,
03:41an untenable level. We were at 145%. They were at 125. And we had a meeting in Geneva last weekend,
03:50and both sides came down 115%. So the U.S. is now at 30. A 10% reciprocal tariff that's on a pause
04:01and 20% fentanyl tariffs. Those were put on back in February. So those are already in the system.
04:08So I think most of the small businesses you're talking to, they were probably referring to the
04:17very high triple-digit tariff levels, which have now been brought down.
04:22Yes, some of them were, but there's also just this idea, a lot of them saying, look, I support what
04:28President Trump wants to do. I support the idea of wanting to bring manufacturing back to the United
04:32States, but it can't be done in a month or three months or even a year, that there's just an entire
04:38infrastructure in this country that is lacking. They can't buy what they would love to buy. Most of
04:44them, as you know, if not all of them, are patriotic. They want to buy American goods. But a lot of this
04:49stuff just isn't made in America. I mean, this is, we could go into a long history about the hollowing
04:54out of the manufacturing base that is neither the fault of you, me, or President Trump. But
04:58it did, it does exist. And it will take years to make the manufacturing infrastructure that these
05:04small businesses rely on.
05:05Well, Jake, I think what we're going to see, just like we saw with the UK trade deal, my sense is
05:12it's what we'll see with China. We don't want to decouple with China. And President Trump actually
05:17wants to open up China for business. So the manufacturing we want to bring back, we had during
05:24COVID, we realized that we had some very strategic shortfalls, whether it was medicines, semiconductors,
05:31steel, the other products. So the long term, the medium term goal is to bring back these strategic
05:39industries as quickly as possible. And I think we will continue trading with China in the kinds
05:45of products that these small businesses are talking about at lower tariff levels.