Treasury Secretary Scott Bessent Grilled On Trump Saying Walmart Should 'Eat The Tariffs' On China

Forbes Breaking News

On Sunday, Treasury Secretary Scott Bessent spoke to CNN's Jake Tapper about President Trump's tariff policies.

Transcript

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.

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