Treasury Sec. Scott Bessent: Mayor Mamdani is Leading Democrats 6/24/26

Summary

Squawk Pod – June 24, 2026

Treasury Secretary Scott Bessant: Mayor Mamdani is Leading Democrats

Hosts: Joe Kernen, Becky Quick, Andrew Ross Sorkin
Guest: Treasury Secretary Scott Bessant

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Episode Overview

This episode of Squawk Pod centers around a wide-ranging interview with Treasury Secretary Scott Bessant, focusing on the administration's economic doctrine, recent tariff policy rewrites, the evolving landscape of the U.S. political parties, U.S. leadership in artificial intelligence (AI), the strength of the dollar, and global negotiations—particularly with reference to New York’s Democratic primaries and Iran. The conversation delivers a mix of policy deep-dives and lively reflections on America’s economic and geopolitical position, all grounded in current headlines.

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Key Discussion Points & Insights

1. U.S. Economic Doctrine and National Capacity

(16:09–22:10)

• Bessant discusses the U.S.'s renewed focus on using its economic power to serve national interests and how the Trump administration sees itself as returning to "old values" but with a "new system."
• He points to U.S. economic and military might, energy independence, and especially innovation as central pillars of current strength.
• Historical reflection is interwoven: "Adam Smith couldn’t have imagined what the United States would have unleashed by letting people innovate…" – Scott Bessant (19:50)
• Bessant frames current policy as a response to decades of America’s economic interests diverging from policy—now, he says, the U.S. must insist on reciprocity from allies and fairness from trading partners.

2. Tariff Policy Reboot

(22:10–25:58)

• Tariffs are highlighted as both an economic and historical tool. Bessant roots current policy in Hamiltonian tradition and contends they have not significantly contributed to inflation:
  • "People like to say that it's added to inflation, but we look at the data, the structural inflation has been in services." – Bessant (14:14, 23:54)
• The U.S. is moving from previous executive tools (IEPO) to Section 122 tariffs (10% global), and USTR is conducting Section 301 studies which may soon revert tariffs to former levels.
• Bessant touts the successful strategic use of tariffs for leverage in international agreements—particularly with the EU and other allies.

3. Political Landscape – NY Primaries & The Future of the Democrats

(06:47–07:54; 20:43–21:30)

• Discussion of New York City Democratic primaries—Mayor Zora Mamdani emerges as party leader, marking a clear progressive shift.
• Bessant predicts this is not just a local phenomenon: “...it's not the fringe Democratic left anymore. It's the mainstream of the Democratic Party.” – Scott Bessant (20:58)
• Questions are raised about whether this leftward push can succeed nationwide.

4. America’s Role in Setting Global AI and Trade Standards

(25:58–28:21)

• Bessant is adamant that the U.S. must write the rules for AI and the new economy:
  • "I think we have the obligation to do it because we're the leader. We are the AI superpower. China's next and France is a distant third." – Bessant (26:28–26:47)
• Emphasizes recursive learning in AI and cautions against overregulation stifling U.S. innovation.
• Pushes for the U.S. to continue to set global tech standards (5G, 6G), working with allies.

5. Dollar Strength and Financial Leadership

(28:21–34:19)

• Bessant discusses the necessity of dollar dominance for global financial leadership, noting a recent (perhaps underappreciated) dollar rebound.
• Describes how sanctions compelled adversarial nations (e.g., Venezuela, Iran) to return to invoicing in dollars. Predicts Russia will do the same post-conflict.
• "The dollar, it's our liquidity, it's our capital markets, it's the depth and breadth. Everyone wants to be here." – Bessant (29:22)

6. Iran Negotiations – Oil, Sanctions, and Diplomacy

(30:22–33:33)

• Bessant details the U.S. approach to Iran: military intervention, economic sanctions ("epic fury"), and now tight control over any released Iranian funds (for food/medicines, not for the regime).
• Asserts that after significant decapitation of Iran’s government and military capacities, for the "first time since 1979, the Iranians are willing to discuss their nuclear program." (32:26–33:33)
• Quotes Trump’s social media statement clarifying no funds are being sent directly to Iran.

7. Fed Policy, Inflation, AI, and Economic Growth

(34:19–42:07)

• Bessant sees U.S. prospects for strong, non-inflationary growth, credits the nation's energy position, AI investment, and tax policy.
• On the Fed: Bessant has weekly breakfasts with Chair Kevin Warsh, sees value in frequent dialogue, and supports an end to "DOT projections"—"The only good thing about the dots was when…we had a trading model that actually traded against the dots because the dots are always wrong..." – Bessant (38:06)
• Believes the U.S. could "have a high GDP economy without the traditional inflation seeping in" due to an AI-driven productivity boom, similar to the Greenspan era. (39:47–40:36)

8. Economic Inclusion: “Trump Accounts” and Broadening Prosperity

(43:51–45:49)

• Introduces "Trump Accounts"—investment accounts seeded for every child under 18, with foundational contributions from Treasury and major philanthropists.
• Aim is to include the 38% of American households without any stake in the stock market: "We bring more people into the system... we're going to be helping your viewer base...that 38% of Americans." – Bessant (44:07–45:49)

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Notable Quotes & Memorable Moments

• On Economic Power and History:
  • "President Trump has reawakened...the US has both military might, but we have economic might. And for a long time, our economic might was not only was it challenged, it was taken for granted and it was abused." – Scott Bessant (17:10)
• On Tariffs as Policy:
  • "Alexander Hamilton was the original tariff man." – Scott Bessant (22:45)
• On AI Leadership:
  • "We are the AI superpower. China's next and France is a distant third." – Bessant (26:28)
• On Iran Negotiations:
  • "We didn't have regime change, but we've changed the regime." – Bessant (32:26)
• On Dollar Dominance:
  • "It's never left as the centerpiece for the global currency system, but we're reinforcing it." – Bessant (29:22)
• On Economic Inclusion:
  • "Every child under 18 can have one. Children who were born during this administration get $1,000 seed investment from Treasury." – Bessant (44:07)

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Important Segments & Timestamps

• Setting the Episode’s Theme—Brief on tariffs and primaries (01:09–01:19)
• New York City Democratic Primaries Analysis (06:47–07:54; revisit at 20:43–21:30)
• Bessant’s Core Speech & Economic Doctrine (16:09–20:33)
• Tariff Policy—Historical Roots and Current Practice (22:10–25:58)
• AI & Tech Leadership (25:58–28:21)
• Dollar Strength & Financial Architecture (28:21–34:19)
• Iran, Sanctions & Diplomacy (30:22–33:33)
• Fed, Inflation, Productivity, and Growth (34:19–42:07)
• Economic Expansion: Trump Accounts (43:51–45:49)

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Style and Tone

The conversation blends statesmanship and directness (via Bessant), trademark Squawk Box banter and levity (especially between Becky and Andrew), and sharp, at times nostalgic, reflections on U.S. economic history.

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Summary Takeaways

• The U.S. is entering a period of assertive economic nationalism, leveraging its unique strengths to redraw global economic rules—from tariffs to AI.
• Tariffs, once a dirty word, are back on the table as a policy tool, in the Hamiltonian tradition.
• The political left is ascendant in major urban centers, but whether that becomes a national strategy is an open question.
• Strong U.S. dollar and financial architecture remains a cornerstone, even as global events test its dominance.
• The administration is keen on economic inclusion, using “Trump Accounts” to expand Americans’ equity participation.
• AI and innovation drive optimism for robust, non-inflationary U.S. growth.

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This summary delivers a comprehensive, insightful guide to the episode, capturing both substance and style — perfect for listeners and non-listeners alike.

Transcript

[Joe Kernen]

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[Joe Kernen]

Hi, I'm CNBC producer Katie Kramer. Today on Squawk Pod, Treasury Secretary Scott Besant a robust conversation that starts with tariffs.

[Scott Bessant]

We have rebooted the tariff program. Right now we have something called Section 122 tariffs, which is a 10% global

[Joe Kernen]

tariff and covers the New York City political primaries.

[Scott Bessant]

Last night we saw the mayorman, Donnie is the leader of the Democratic Party and the establishment Democrats. Finally we are seeing where the Democrats are going in this election.

[Joe Kernen]

Plus America's role in writing the rules of the road for AI I think

[Scott Bessant]

we have the obligation to do it because we're the leader. We are the AI superpower. China's next and France is a distant third.

[Joe Kernen]

Plus the rest of today's news that got us squawking oil prices, the newest Dow component.

[Becky Quick]

And you remember the sheriff on the Rifleman? No, you don't.

[Andrew Ross Sorkin]

I don't even remember the Rifleman.

[Joe Kernen]

It is Wednesday, June 24th. Squawk Pod begins right now.

[Scott Bessant]

Stand Becky by in 3, 2, 1.

[Andrew Ross Sorkin]

Good morning everyone. Welcome to Squawk Box right here on cnbc. We are live from the NASDAQ Marketsite in Times Square. I'm Becky Quick along with Joe Kernan. Andrew is out today.

[Becky Quick]

Take a look at crude prices which we one of the first things we look at in the morning and 72 now almost 71. President Trump putting energy companies on notice earlier this morning in a post on Truth Social president wrote that the big oil companies aren't dropping their price at the pump commensurate with the sharply lower prices they are paying for oil. And those prices are dropping like rock. In other Words customers are being gouged. That instructed the DOJ to immediately start looking into this. Gasoline prices better start going down a lot faster than what I'm seeing. President DJT of course, you know there's refining and crack spread take some time to work through.

[Andrew Ross Sorkin]

But the crazy thing is and they're

[Becky Quick]

different company, a lot of them are different companies than the majors, than the producers.

[Andrew Ross Sorkin]

The national average ticked higher. That's probably pretty frustrating. You want to see that come.

[Becky Quick]

Although it's below 4 anyway. Triple A says a gallon of gas averaging 393 today across the United States. Unless you're lucky enough to live in California. That's down from $4.52 just a month ago.

[Andrew Ross Sorkin]

And actually this morning, I don't know if we can look at diesel prices this morning. Diesel this morning fell below $5 a gallon for the. The war kicked off. So I think you can watch that pretty closely too. We should say the Dow Jones Industrial Average is getting a new member. S and P Global says that Google's parent Alphabet will replace Verizon in the index ahead of trading next Monday. Alphabet will join mega cap tech peers in video, Amazon, Apple and Microsoft in the Dow. Its share price of about $350 will make it among the five or six most impactful stocks in the index. That stock right now, $347.85. It is up by about half a percent this morning. Honeywell International will remain in the Dow under its new name Honeywell Technologies. That comes after a spin off of Honeywell Aerospace. The spinoff firm will not be in the Dow.

[Becky Quick]

That's not long for this world.

[Andrew Ross Sorkin]

For the world of the Dow.

[Schwab Announcer]

Yeah.

[Becky Quick]

Is that the lead story? Verizon is still a Dow component.

[Andrew Ross Sorkin]

Well, actually I was a little surprised. I was thinking Google's not.

[Schwab Announcer]

Yeah.

[Becky Quick]

As I was thinking, that's the converse of. Yeah. Okay. That, that makes. I think, you know, I've already been calculating my own personal Dow without Verizon

[Andrew Ross Sorkin]

and with kind of the way Philippe Lafont thinks.

[Becky Quick]

Yeah, kind of the way. Yeah. That's my index of the future.

[Andrew Ross Sorkin]

You're thinking about next year, not 10 years.

[Becky Quick]

He's coming in again for another half hour. You would do that when you.

[Andrew Ross Sorkin]

Yeah, I would take him in a heartbeat. We had more to ask him yesterday before he left.

[Becky Quick]

I talked to him after I go. You had to get just inundated. He said he's never had that much.

[Andrew Ross Sorkin]

Yeah, well the big, the high level stuff. He was talking about emails really. I sat and thought about it through the day. There were a lot of things that. A lot of food for thought. Just the way that he thinks about things. Thinking of the index of the future. What's going to be the first, you know, 10 trillion.

[Becky Quick]

I don't know if anyone. I don't know. You know, knowing him and sort of being friends and seeing what he's done, these are things I wanted to know. How does you know not okay, what's the profit margin that you're. Are they going to rise or fall with Samsung or something? I want to know how did you do this? You know, you're still a young guy. He's older. He's younger than his actual age. As a. No, he looks younger than his actual age.

[Andrew Ross Sorkin]

But that. We weren't talking about this yesterday. And to be that accomplished and be that wise, you have to have some years. Yeah, that doesn't.

[Becky Quick]

Right. But to start 99 with, you know, hardly, you know, very small beginning. Even though he had a good start,

[Andrew Ross Sorkin]

I liked his story about how he couldn't get hired at Apple, so he just went fishing.

[Becky Quick]

That's a good. That's a good story for. Good story for a lot of.

[Andrew Ross Sorkin]

A lot of kids who are looking for jobs right now. And then his parents cut him off and said, you gotta go get a job. So he went out.

[Becky Quick]

Then I realized he's gotta be the most successful person that ever came from McKinsey. I mean, I can give you 10. You know what a consultant is? It's a guy from out of town who doesn't have a job that comes into your.

[Andrew Ross Sorkin]

But to tell you you don't have a job.

[Becky Quick]

I can go other CEO. I guess Gerstner actually was.

[Andrew Ross Sorkin]

Oh, Gerstner.

[Becky Quick]

Yeah. Yeah. He's McKinsey. But then I can give you a long list of McKinsey just. It should not have been CEOs. We don't have to mention any of these. I know. You know, some.

[Scott Bessant]

Your next congressmember, Brad Lander, give it

[Becky Quick]

up one more time for the mayor of New York City.

[Andrew Ross Sorkin]

Three progressive political candidates endorsed by New York City Mayor Zora Mamdani, winning Democratic primaries for House seats.

[Becky Quick]

Oh, good.

[Andrew Ross Sorkin]

Two incumbents who represent parts of Manhattan, Brooklyn and the Bronx were defeated separately. New York Assemblyman Micah Lasher beat fellow state lawmaker Alex Boris in a primary race for longtime U.S. representative Jerry Nadler's seat in Congress. President John F. Kennedy's grandson, Jake Sloshberg also lost in that race. Two political action committees affiliated with major AI companies had pumped $20 million into that contest. Either Backing or opposing Boris? Yeah, that's. We focused on that earlier this week. Was that just yesterday? It must have been.

[Scott Bessant]

When we were without.

[Becky Quick]

I took a good look at the. For me, it was like, you know, bad or worse. That were the choices in a lot of those. And they went with worse. We actually went with worse.

[Andrew Ross Sorkin]

I did hear some political.

[Becky Quick]

I don't know about we. Not we. They.

[Andrew Ross Sorkin]

They did hear some political commentary this morning about whether you can take things away from that. Is this just New York City or is this something where you can really.

[Becky Quick]

Do they win the generals? They could win the generals here, but

[Andrew Ross Sorkin]

nationw nationwide, I don't know about that. And that's the question. Does the Democratic Party need to push further left or does it need to step away from that if it wants to win on a national?

[Becky Quick]

And this. It's Mika Brzezinski. Micah, but Micah like the sheriff on the Rifleman.

[Andrew Ross Sorkin]

I was thinking Micah like the, like the stone.

[Becky Quick]

You remember the sheriff on the Rifleman? No, you don't.

[Andrew Ross Sorkin]

I don't even remember the rifleman.

[Becky Quick]

Chuck Connors, Seton hall, baseball, basketball. The greatest. He was like Clint before Clint, but Clint was on at the same time in Rawhide. Treasury Secretary Scott, you know, get him up, get him up. Treasury Secretary Scott Bessant says the US will be a more demanding partner when it comes to trade relationships. At a Wall Street Journal op ed which echoed his speech, I think at the New York Economic Club, Besson said other countries should expect a nation that is now more aware of its interests and more prepared to protect them. The piece was adapted, as I said, from a speech that Treasury Secretary gave last night at the Economic Club of New York. Besson spelling out core principles for his department. Those include making sure that the US is more self sufficient, make things here in AI and critical minerals and committed to the use of power to fight back against discrimination aimed at US firms. Almost like the Trump Doctrine. Is these five features spelled out because Scott, I don't think would want to call it. Even though Hamilton was a Treasury Secretary, I still don't think Scott would say these are mine. These are. He would.

[Andrew Ross Sorkin]

He said they were.

[Becky Quick]

He said he, his and the President.

[Andrew Ross Sorkin]

He actually referred back to Alexander Hamilton.

[Becky Quick]

Oh, yeah, I know. But, but, but I still think it's. It's. He wouldn't say this is the Besant doctor. And he'd say it's the doctor.

[Joe Kernen]

Oh, no.

[Andrew Ross Sorkin]

He said this is the President's. And he, and he repeatedly said that last night. It was actually at the dinner last night where he laid this out. It was a celebration of the 200th anniversary of the country. And his, his point was that we have realized that there are threats that we are just waking up to and we need to be more careful about how we use America's power and its economy, its economic power to make sure that we are cutting fair deals, that those deals then benefit the average American.

[Becky Quick]

I think they, he did bring it back to that, but starting with, okay, there's the world that our founders looked at and they had certain principles and guiding challenges and concerns that totally changed. And in the post war period where we were trying to rebuild the rest of the world, we were this shining light in the world and people, we were ready to let people sort of, I don't know, what do you call it when you're in a race and the car in front of you, you get behind it. We were letting people not take advantage of us, but we're graft office. But there comes a time where you can't be taken advantage of when in all this globalization, cheaper prices, it works for a little while to help the countries, but eventually it comes back. In globalization, you saw it hollowed out the entire well.

[Andrew Ross Sorkin]

And he said the only good thing about the pandemic. He said this before. He said the only good thing about the pandemic, it showed us our weaknesses where we have allowed our supply chains to be weakened to the point that it is a national defense concern on some issues. Well, and some of those areas you laid out, like semiconductors, like pharmaceuticals, those are the areas.

[Becky Quick]

You heard all of it last night. And I know you got, you know, you've got a lot going on. But he will be here.

[Andrew Ross Sorkin]

I can't believe I can't be.

[Becky Quick]

Well, you already. But you heard everything last night.

[Andrew Ross Sorkin]

I heard everything last night. I got to talk to him last night and there were some interesting. Brett Baer was there and interviewed him afterwards. And there were some really interesting things that came out of that where he talked about Kevin Warsh, what he thinks about what the Fed is likely to do under Warsh. He talked about the private credit, which he's a big fan of private credit. But he laid out that private credit will disappear in times of hardship and you cannot use it if there is a downturn in the economy. You can't use it like you can the small banks and community banks. And he thinks, you know, one thing that people haven't focused on, he's very focused on small banks and community banks remaining really strong for that reason. If there is a downturn and a pullback in credit. Those small banks you can motivate by opening the window by doing different things. You can't do that with private.

[Becky Quick]

You ask whenever you're interviewing Buffett for, for people to write in questions. Why don't you. You're not going to be here, but give me some questions for the Treasury. What I would like to ask him, he talks about and the dollar has been rallying, talks about how important that is. Well, one of the reasons it's rallying is the notion that Kevin Warsh is big on dollar stability, which is the side of the mandate that I think is less important, at least in certain times for the president. He wants full employment, obviously, but he, he wants full employment more maybe than he likes lower interest rates, which could mean, you know, dollar devaluation.

[Andrew Ross Sorkin]

Okay. A couple of questions that I didn't hear answered last.

[Becky Quick]

You write them down. So don't tell them now write them down. And I'm going to ask him.

[Andrew Ross Sorkin]

AI is a really big one.

[Becky Quick]

Okay. I'm going to take credit for him.

[Andrew Ross Sorkin]

Okay. Okay. I've got three good questions.

[Becky Quick]

Write them down. I'll refer to this.

[Andrew Ross Sorkin]

But I am very disappointed not to be here. But it's right. It's great that he's going to be here in studio with you.

[Becky Quick]

I even came I have to leave

[Andrew Ross Sorkin]

to catch a phone.

[Becky Quick]

I'm going to call him. Quick takes.

[Scott Bessant]

Yes.

[Andrew Ross Sorkin]

Oh, good. Yeah, I like that. And I would not leave under other conditions, but I have to get to.

[Becky Quick]

I know it.

[Andrew Ross Sorkin]

And it's got to do with Institute because Priscilla Chan and this is for CNBC cures. And I'm going to be speaking with her, meeting with her tonight and speaking with her tomorrow. So I wouldn't leave for any other reason but CNBC cures.

[Becky Quick]

All right. Well, I'm going to just the two looking across my question I'm asking when he comes in if he wants to wear a jacket. I brought one.

[Andrew Ross Sorkin]

You should.

[Becky Quick]

Really? Yeah, I'm going to ask him. I might have him take off his jacket.

[Andrew Ross Sorkin]

Good luck with that. I think you should put yours on. We'll see.

[Scott Bessant]

Tease will be next.

[Joe Kernen]

Coming up on Squawk Pod, an extended interview with Treasury Secretary Scott Besant, artificial intelligence, the Federal Reserve and of course, tariffs.

[Scott Bessant]

People like to say that it's added to inflation, but we look at the data, the structural inflation has been in

[Joe Kernen]

services and if all goes according to the administration's plan, the tariff rates are

[Scott Bessant]

going to go back to exactly where they were.

[Joe Kernen]

That conversation is up next.

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[Joe Kernen]

Welcome back to Squawk Pods from CNBC. Here's Joe Kern.

[Scott Bessant]

Stand by Joe.

[Schwab Announcer]

His mic.

[Becky Quick]

You join us now. Treasury Secretary Scott Besant in studio. Glad to have you here, sir.

[Scott Bessant]

Joe, good to be with you this morning.

[Becky Quick]

Quite a speech last night and I don't know whether you have help or whether it's all you, but it was, I thought it was very eloquent and building on some things that I think you've, you've touched on in other settings. I think at other, I think in Dallas you talked about maybe at the Reagan Library. But I think as we are celebrating this 250 years of the greatest nation on earth, we need to just, I think reflect on how we continue to do what our founders wanted to do in a totally different world with different challenges. And I think your words were the disciplined use of America's economic power in service of our sovereignty. And I think that, I think that I'm going to remember that. I'm going to put that to memory because I think it's very statesmanlike.

[Scott Bessant]

Well, Joe, it's the again, thank you for having me. It's exactly what President Trump is implementing in this historic second term. And as we have the 250th this year, it's a good idea to reflect. And President Trump has reawakened and made us all aware and our allies and our enemies that the US has both military might, but we have economic might. And for a long time, our economic might was not only was it challenged, it was taken for granted and it was abused. And now we are saying that for our allies come along with us. Here are the rules of the road. We want reciprocity and engaging and saying like it is a new system, but old values I think is perfectly appropriate. And you know, President Trump has set the stage for this. When we look at what happened in Iran, that you think about it, we had maximum pressure, then we had epic fury, then we had economic fury, and then we had the blockade. And that's how we got the Iranians to the negotiating table.

[Becky Quick]

In just looking over your remarks, what I was struck by, and I think we can, since we have time, we can make the case that times are different in terms of post war United States, where we almost could afford to be taken advantage of by the rest of the world because we were so dominant. But things changed and those old, those old habits turned into things that actually hurt our country and hollowed out the core. And we're still dealing with that now.

[Scott Bessant]

Well, it's what it was in our interest to rebuild our allies to defend against communism in the post World War II era. And I think that our interest strayed from our economic policies. Our economic policies strayed from our interest that over the past couple of decades and President Trump has just called for a rethink and we have all hands on deck in the administration, whether it is our foreign policy, our economic policy and our military policy. And everyone wants to be part of the U.S. economy. We're the world's largest consumer. We're the world's great innovator. And you know, I'm responsible with our dialogue with China and I try to put myself in my Chinese counterparts seat. And when they look at the United States, what do they revere in the United States? First of all, we're a great military. We've seen that in the past year. Our economy and the strength of the dollar, that our energy independence, our energy dominance and our innovation. No one has innovation like this. I got a question last night. It's also the 250th anniversary of Adam Smith's the Wealth of Nations. And Adam Smith couldn't have imagined what the United States would have unleashed by letting people innovate the form their own businesses and live in a free society. When you unleash human potential like only the United States has. Look, look what we've done. We should be proud of this in our 250th year.

[Becky Quick]

I wonder what it would cost to, to make a couple of thousand copies of that and pass it around in New York City. Did you see the results of those elections?

[Scott Bessant]

Well, you know who predicted this early on was I was in the Oval Office meeting with President Trump when the mayor came in to see him and he said, you're the leader of the Democratic Party now. And that was months ago and last.

[Becky Quick]

I wouldn't have believed it. But after last night, I wonder Last

[Scott Bessant]

night we saw the mayorman Damni is the leader of the Democratic Party and the establishment Democrats. Finally we are seeing where the Democrats are going in this election. And it will be a very stark choice between Republican parties and the it's not the fringe Democratic left anymore. It's the mainstream of the Democratic Party.

[Becky Quick]

What do you think happens? I mean, these people probably win in New York for all I know. I'm from New York Jersey, but can you take this message national?

[Scott Bessant]

We'll see. Seems to be, seems to be playing in Maine. The seems to be playing in Michigan. Seems to be. So again, if this is the way the Democratic Party wants to go and it seems to be more power to them because we are going to offer a stark contrast. Do you want to keep more of your money? Do you want to have that or do you want to have the state takeover? And what we can't get is an answer. Where's this ever worked before, Joe, that you know, as we see the, the regimes collapsing in Venezuela, the regimes collapsing in Cuba. Where is this ever worked? I can't get an example. I'm an economic historian.

[Becky Quick]

You divided, I guess what, what you think the way to approach things are into five categories that you went over last night. I think given the background that we just talked about with how we have been taken advantage of in your view and in the president's view, I think these first two things, national capacity, obviously we need to make things here. And then the second is reciprocity. And both of those play into the whole idea of tariffs. And I don't know if Hamilton would have been in favor of.

[Scott Bessant]

Hamilton was the earliest tariff ban. He was in favor of tariffs for several reasons. He wanted to protect the nascent industry of the United States of America as we built capacity to compete, especially with the Brits. And he also wanted to fund the Treasury. So Alexander Hamilton was the original tariff man.

[Becky Quick]

But I guess what year do you think it became just such a terrible word?

[Scott Bessant]

Look, I'm not sure when it did. There were great tariff fights during the McKinley era but the tariffs had worked very well. And then the income tax came in at a very low level and then the income tax just kept getting ratcheted up. We had an income tax in the United States right after the Civil War and it was to pay down the United States debt. But we paid down the debt and then the income tax went away, came back right after World War I.

[Becky Quick]

Okay, so. So tariffs at this point obviously have in your view have been de minimis in adding to the structural inflation that we have or worth it or how would you characterize?

[Scott Bessant]

Look, the data, people like to say that it's added, added to inflation but we look at the data, the structural inflation has been in services and you, you don't import the services. And what we've seen there is in many of the goods the prices that have been paid by the producers. We saw many of the Chinese producers, some of the Chinese low end clothing companies reduce their prices by More than 50%.

[Becky Quick]

Yeah. And at this point the method to use because of what happened with the Supreme Court. Yeah.

[Scott Bessant]

Well that was unfortunate. The President used IEPO which was a very efficient way to put on tariffs. We have rebooted the tariff program. Right now we have something called section 122 tariffs which is a 10% global tariff. Currently USTR Ambassador Jamison Greer is doing studies for section 301 and if those studies are successful, and I have no reason to believe they won't be, but we don't know until they are, then the tariff rates are going to go back to exactly where they were. I would say the good thing about having used IEA in 2025, it allowed us very quickly to get to tariff deals or trade deals that we never would have gotten to before the EU. The EU is going to pay us 15% and they are going to charge us zero. So we have had a big the rebalancing there. So. And they're bringing down their non tariff trade barriers, many of their unfair financing practices and it's the same around the world whether it's Japan, Korea, our allies, you know, whether it's China. So I think it's been a big success at treasury. Assuming that the 301 studies go through, we think that there's going to be a de minimis decline in tariff revenue. In our projections for fiscal, for calendar

[Becky Quick]

year 2026 we should feel comfortable dictating a lot of Trade rules as the United States. Your third principle is that America is going to write the rules of the next economy. So, so we're going to write the rules on. On. On trade. We're going to write the rules on AI. Do we have the right to do that? I think that you feel that we do and the President feels that we do. We don't want, we don't want red communist China writing the rules on.

[Scott Bessant]

Well, I think we have the obligation to do it because we're the leader. We are, we are the leader that I just accompanied the president to the G7 meeting and it was the US tech companies who are by far in

[Becky Quick]

the lead and still at this point, no doubt.

[Scott Bessant]

Oh no doubt. And China knows that and the, that the nature of AI and the recursive learning of the models that once you get in the lead then the models they start working to train themselves and it's very difficult for anyone to catch you if you keep up that path. But I think what's important here is we can't let other countries bog us down with regulations. You know, we're seeing that globally US is an energy superpower and then other countries are trying to use extraterritorial measures to say oh like you have to get your nat gas this way, you've got to have a methane cap or something like that. And we can't do that in AI and we're not going to do it. We are the superpower. China's next and you know, France is a distant third.

[Becky Quick]

Yeah, we shouldn't be shy about, about forcing our will on the way things

[Scott Bessant]

are done well or setting, setting the global standards just as we set global standards in many, many industries. And it's the standards. When you look back at the self cell phone industry and mobile data, you know it's very important that we use our standards 3G, 4G, 5G, 6G because the country that sets the standards and has the advantage. So for 6G we want to work with our allies and they form a Western alliance. And again the US wants to lead but we want to bring other countries along.

[Becky Quick]

The I guess maybe this is one of the most important fourth position principle that you outlined is financial leadership in terms of currency. I think in terms of the dollar and I don't people haven't seen perhaps the rebound in the dollar in recent months has kind of gone unnoticed because the demise was greatly exaggerated. I think we have a chart where we can look at that. It might not be for all the right reasons, higher interest rates, et cetera. But dollar dominance is a essential.

[Scott Bessant]

Well, dollar dominance is essential. And everything President Trump is doing here, you know, if you look, the new Venezuela is going to is invoicing in dollars. They're coming back onto the dollar system. They've been sanctioned, they were not allowed to translate or to transact in dollars. And now dollar, the dollar is going to be the centerpiece of their trade. They were selling discounted oil to China and not getting dollars. We're seeing in the Iranian negotiations the Iranians will be invoicing in dollars. So everything we are doing is pushing the dollar the back. It's never left as the centerpiece for the global currency system, but we're reinforcing it. You know, I would anticipate when the Russia Ukraine conflict ends that Russia will want to come back in the dollar system because again, the dollar, it's our liquidity, it's our capital markets, it's the depth and breadth. Everyone wants to be here. And I think many times the great, great thing about the United States is we, we course correct when we go too far one way or the other. And I think we should not be the shy about flexing where we have advantages and where we have advantages share with our allies and push back on those who are not aligned with us.

[Becky Quick]

You need to I guess convince certain people that after 40 years of not being able to sell oil for dollars that that's finally going to happen. I'm sure that that was something that you either signed off on or came up with it before we do. I think the president, we're talking about Iran. He just posted something on True social. Iran has informed the US that despite trouble, trouble making fake news, reporting to the contrary, there are no tolls, no insurance costs and no other charges of any kind being sought or received by Iran on ships traveling the Strait of Hormuz. If this is false information, negotiations would end immediately. Additionally, no money has been given to Iran or released from their money to them by the US we releasing some of their money that is totally controlled by us to our farmers and ranchers for the purchase of corn, wheat, soybeans and more food is desperately needed in Iran and we will be purchasing it for them exclusively from the United States. Thanks for your attention to this matter. Donald J. Trump.

[Scott Bessant]

Well, I think that's a very, very important statement for the American people to understand. So any, any money that the Iranians get first is going to be used for the benefit of the Iranian people. It is going to be Iranian frozen funds. And the U.S. treasury will have people sitting the Initial money will likely be released from Qatar. US treasury will have people sitting in Doha overseeing that, how the money is allocated and a very large percent of it will go to buy US Foodstuffs and medicines. So we will be recycling the money back into US products, but it will be overseen by Treasury. The in the Middle east

[Becky Quick]

at this point, I mean, would you say that, that the President's pragmatic approach to ending this, is it an off ramp? Did we accomplish everything we needed to accomplish in your view?

[Scott Bessant]

Yeah, look, I think we didn't have regime change, but we've changed the regime. And that's what took a long time in terms of getting to the negotiations. The actual fighting, which our military destroyed, their air force destroyed, their navy destroyed a large part of their missile stockpile, but more importantly destroyed 80 or 85% of their missile producing capabilities. So we've done that. But Joe, what took a long time was finding people to negotiate with. You know, if you think about the Iranian power structure, it's three, it's three different groups. It's the elected officials on one side, the IRGC in the middle and then the clerics on the other. And those were decapitated at the first level, some at the second level, and now we are down at the third level. And what President Trump has done with a combination of epic fury, economic fury, and the blockade. For the first time ever, for the first time since 1979, the Iranians are willing to discuss their nuclear program. Never happened before.

[Becky Quick]

Treasury secretaries love strong dollars. Obviously, we've never, I don't think we've ever had one that would ever say they'd like a weaker.

[Scott Bessant]

Well, what we love is doing the right things to make the dollar strong. So we want certainty. We have great tax certainty thanks to the working families tax cut, also known as a one big beautiful bill. We have regulatory certainty thanks to President Trump's deregulatory regime. And originally he told the cabinet, for every one new regulation, you've got to take out 10, 10, I think we've taken out 100. So great regulatory certainty and the US is the only manufacturing location in the world that provide great energy certainty. Because now they aware they are the leading energy producer and exporter in the world.

[Becky Quick]

I guess I was getting to it in a backward way. To Kevin Warsh, dollar stability seems to be very, very important to him. Dollar stability could mean higher interest rates for longer, I would think. And I'm wondering how that plays into President Trump's desire.

[Scott Bessant]

Again, you can have a strong dollar when rates are being Cut because the US economy is accelerating. You can have a strong dollar because the rate interest rate differential is high. But mostly I think we're going to have a strong dollar because our economy is pulling away from the rest of the world. Look at the way our economy has performed during the Iranian conflict. The rest of the world has gone negative to zero, plus or minus the point something percent and the US Economy that because we went into this on very strong energy footing, that on very strong capex cycle from both the AI and the tax bill, the US economy has really performed and we're going to get to the other side of this conflict. As you were just showing. Energy prices are coming down, inflation is going to drop and the economy I think is going to be accelerating on a non inflationary basis for the rest of the year and for the rest of the President's term.

[Becky Quick]

I think maybe in light of, of what we're seeing in polls and elsewhere about Americans continuing to have affordability concerns, the fifth and most important thing that you outlined last night was that all of this, there's one goal in all of this and that is to have the average American participate in all this prosperity.

[Scott Bessant]

And look, this is what happened. We had the China shock and the American manufacturing base was decimated and we are trying to bring that back. And we've got to make sure that these policies work for everyone, not just like the coastal elite, not everyone within 10 miles of here. Because you know what happened was a lot of the economic growth there was not evenly distributed. President Trump's first term hourly workers did better than managerial workers. The bottom 50% of households did better than the top 10%. And I think we're going to get back to that. Before the Iran conflict we had had real wage growth every month up until April. And I think we're going to be back in that cadence. And look, we understand that the Biden administration towards the affordability worst inflation in 50 years, 21.5% increase in the price level and that is still smarting and we are working every day to try to bring that down.

[Becky Quick]

Do you think that the recent rebound that we've seen in some, in prices cpi, cpi even, even on, on the core is that seeping from, from $95 oil, is that what did it or are there still, are there still structural things in the economy and I'm not necessarily saying tariffs but perhaps tariffs that are causing it to be well above the Fed's target? We've been above the Fed's target for, for how long?

[Scott Bessant]

For years.

[Becky Quick]

Well 2%.

[Scott Bessant]

Well I in fact in February I thought that we would be very close to the Fed's target by middle of the summer September and look the Fed thought that also. The Fed thought that also we had rate cuts at the end of last year. The DOT projections which are you glad

[Becky Quick]

wars won't do projections?

[Scott Bessant]

I don't think anyone should do DOT projections. The only reason I ever liked the dots was when I had my investment business we had a trading model that actually traded against the dots because the dots are always wrong that the the Fed board and their participants who do the dots they, they kind of get worked up. It's group think they move one way, the dots start pricing in a lot then you can trade against that, then they move another way and you can trade against that. So that's the only good thing about the DOTS that I do applaud Sher Washes getting rid of forward guidance. I think that that is kind of a crutch that market participants have started leaning on.

[Becky Quick]

How much interaction should you have with Kevin Wash? Should you have lunch every week?

[Scott Bessant]

Is that we have breakfast every week. I did the same with Chair Powell. I think we had 41 breakfast and look it is important for the US treasury and the Federal Reserve to discuss ideas, to discuss policy changes. Where do we see the economy going? Where do we see regulation going and what do we think are the challenges?

[Becky Quick]

Do you think that productivity and gains from whether you think it's the President's policies, whether you think it's AI, you think it's going to be a different world, a world where an economy can run hot. We just lost Alan Greenspan and there's a lot of comparisons to the way that the chair war should should be managing things based on, on letting an economy run hot and still having lower interest rates.

[Scott Bessant]

Well I wouldn't call it let it letting the economy run hot because that connotation is that inflation is running okay,

[Becky Quick]

not I think strong a good gdp.

[Scott Bessant]

I think we can have a high GDP economy without the traditional inflation seeping in. And as over the past few days we read the obituaries on Alan Greenspan he had the foresight that in the 90s productivity was about 1.5% or leading into the 90s he saw that the office modernization and the Internet could be a boom for non inflationary growth and he let the economy I think that there was in early 97 there was one tap on the brakes rate hike but other than that we had the longest sustained growth period in history. And I think there's a very good chance that we could see that again.

[Becky Quick]

But is there at this point still an underlying inflation rate that the Fed Fed needs to be concerned with? Would you expect rate cuts this year or even next year given that we're nowhere near 2%?

[Scott Bessant]

Again I'm not going to comment on that. But what I think is that we do need to have an open mind on the price or the inflation impact of the Iran conflict and let's see what inflation looks like on the other side of this. And then we have an open mind that the AI boom could up productivity and be disinflationary, get us back down to target. What I am confident is that Kevin Warsh will do what will take the best path to satisfy both the inflation mandate and the growth mandate. And look he came out tough talk talking about the inflation a lot about price meeting.

[Becky Quick]

I mean if you had, you probably won't share with with me but have you had conversations with the President that maybe it's not the right time to cut rates?

[Scott Bessant]

The President that has said both in public and privately that he has every confidence Kevin and Kevin Wash that that's why he chose him because he at the chair Wash is swearing in. And then recently I think we were getting up the airplane in France and the President said I want him to do what's best. That's why I chose him.

[Becky Quick]

You're three. Three and three go into that again. We were making some progress again. You know you have a lot of the fighter goes into the ring with with a great plan to get hit in the face. I get. I mean the Iran war, did it change your view on how we can we can get debt as a percentage of GDP? No.

[Scott Bessant]

So, so 333 the three components where we could have 3% growth. I think we might have been growing at 4 in February. I think we're going to get back and we can have something with a three in front of it this year. As I said the underlying economy has been strong. The other one of the other threes is 3 million more barrel a day equivalents. So crude and nat gas export lng, which we're well on our way to. We've never produced so much energy, never exported so much and then deficit to GDP of 3%. What we didn't get any credit for in 2025 was we had a fiscal contraction. So when we came in 2024 deficit to GDP was about 6.8%. Democrats as they always do blew out spending in the fourth quarter to unsuccessfully get Vice President Harris elected. So that was the highest when we haven't had a recession, haven't been at war. 6.8. We brought it down to 5.5, 5.4 for calendar year 2025. And I don't know if we're going to make progress this year, but I think by the end of the president's term, we can be at something that looks like it could have a three in front of it. And what's important about that, that's when you start paying down overall debt as a percent of the economy.

[Becky Quick]

Do Trump accounts play into might not be under the president's administration where it finally starts to benefit the average American, but is that part of, of having everyone in this country participate in the greatness of the United States?

[Scott Bessant]

Yeah, Joe, 38% of the American public has or American households have no stake in our great equity market that maybe they have jobs at the companies but they don't participate in the stock appreciation. And I think the Trump accounts are one of the ways that are going to remedy that. So every child under 18 can have one. Children who were born during this administration get $1,000 seed investment from Treasury. But importantly, every, every family should open one because we are also going to see contributions. We've seen great philanthropists like Susan and Michael Dell. They're putting in $6.25 billion into the Trump accounts is going to be distributed again to everyone in the up until age 18 across the country. As long as you're not in a 20% upper zip code. So the bottom 80% of zip code by earners, the children are going to get $250 for from the Dells. And we are seeing other philanthropists pay into those accounts. We're seeing foundations who want to pay in. We're seeing some of the states are going to contribute and it's going to be a new corporate perk. So and families can put in up to $5,000. And I think this is going to be a game changer. What we saw yesterday in New York is a disillusionment with the system. We bring more people into the system and I actually think, Joe, we're going to be helping your viewer base that 38% of Americans, you've got 38% of America that can now watch your show every day.

[Becky Quick]

We'll take it. Mr. Secretary, again, you've been generous with your time. We appreciate it and making the effort. I like all the. Can you leave the Secret Service? You need those guys, I guess.

[Scott Bessant]

What's that?

[Becky Quick]

Can you leave the Secret Service guy? You need all these.

[Scott Bessant]

I think we've been a little too successful with the Iranians.

[Keith Landsford]

This episode is brought to you by Schwab Market Update, an original podcast from Charles Schwab. Join host Keith Landsford for this information packed daily market Preview delivered in 10 minutes or less, including projected stock updates, monetary policy decisions and key results and statistics that may impact your trading. Download the latest episode and [e-mail] Market Update podcast or find Schwab Market Update wherever you get your podcasts. Feeling stuck with rising ad costs and flat results, Realize Taboola's advertising platform for businesses unlocks growth beyond search and social Taboola's algorithm engages with high intent users on the open web, accelerating their path to conversion. Powered by an AI model trained on over 500 billion monthly signals, Realize delivers smarter prospecting with privacy, safe targeting. The result? Higher conversion rates and scalable funnel at lower cost. To learn more, visit realize.com podcast in

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[Scott Bessant]

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[Joe Kernen]

and that is SquawkPod for today. Thanks for listening. SquawkBox is hosted by Joe Kernan, Becky Quick and Andrew Ross Sorkin. Tune in weekday mornings on CNBC at 6 Eastern to get the smartest takes and analysis from our TV show right into your ears. Please follow Squawk Pod wherever you like to get your podcasts. We'll meet you right back here tomorrow.

[Scott Bessant]

We are clear. Thanks guys.

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