Scott Bessent Defends Tariffs, Trump Tax And Regulation Plans Before Congress

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Treasury Secretary Scott Bessent delivers his opening statement at today's House Appropriations Committee hearing.

Transcript

00:00minutes. Good. Thank you, Mr. Chairman, the Congressman Hoyer, ranking member, the Chairman

00:10Joyce, ranking member Hoyer, and members of the subcommittee. I'm grateful to join you today.

00:16Treasury is eager to work with members of Congress to fund key priorities to strengthen our economy,

00:23and we look forward to coordinating with you on the President's budget as soon as it is released.

00:27Today, I wish to highlight the Department's efforts to boost U.S. economic growth, improve government

00:34efficiency, and target illicit actors that threaten our national security. The core components of the

00:41Trump economic agenda are trade, tax cuts, and deregulation. These are not standalone policies.

00:48They are interlocking parts of an engine designed to drive economic growth and domestic manufacturing.

00:54Tax cuts and cost savings from deregulation raise real incomes for families and businesses.

01:01Tariffs create an incentive for reshoring jobs and fair trade, and deregulation complements tariffs by

01:07making it easier to invest in energy and manufacturing projects. Already, this agenda is bearing fruit.

01:15In the first 100 days of the new administration, 464,000 new jobs were added to the economy.

01:22In April alone, over 177,000 American jobs were added, more than 40,000 more than economists predicted.

01:32All the while, unemployment remains low while real hourly wages continue to grow.

01:38As important as spurring job growth is wrangling inflation.

01:43And in this endeavor, the administration continues to make tangible progress.

01:47The CPI for energy goods declined in March, as did the price index for core goods.

01:54And the CPI for all items declined for the first time since the COVID pandemic.

02:00While the cost of goods is decreasing, so are energy prices.

02:04Complementary to our efforts to grow American prosperity, we are focused on improving efficiency

02:10across all levels of government, but especially the IRS.

02:14We just concluded a successful tax filing season, but the IRS still needs significant reforms

02:20to deliver efficient and cost-friendly results for the American people.

02:25In this endeavor, we have successfully cut $2 billion from the IRS IT budget without any operational disruptions.

02:33We achieve these cost savings by eliminating, renegotiating, and de-scoping wasteful IT and professional services contracts

02:41and addressing longstanding inefficiencies, such as auto-renewed licenses unused for years.

02:49This intervention alone will save taxpayers hundreds of millions of dollars each year.

02:54We are also taking steps at the IRS to reduce administrative costs, with a particular focus on paper processing,

03:02which has been a long-standing bipartisan goal.

03:05Last year, the IRS spent approximately $450 million on paper processing,

03:11with nearly 6,500 full-time staff dedicated to the task.

03:15Through policy changes and automation, Treasury aims to reduce this expense to under $20 million

03:21by the end of President Trump's second term.

03:25In addition to making government more efficient, Treasury is committed to working alongside the White House

03:30to make America safe again.

03:32To that end, we have launched a maximum pressure campaign against violent cartels and terrorist networks.

03:40We have assessed tens of millions of dollars in civil penalties

03:43against organizations facilitating money laundering along the southern border,

03:48and by leveraging sanctions, we are choking off the financial lifelines of terrorists, criminals, and hackers

03:55from Mexico and Guatemala to China and Iran.

03:59In the first hundred days of the new administration, we have set the table for a robust economy

04:04that allows Main Street to grow.

04:07With Congress and the White House working hand-in-hand,

04:09we expect to see even more positive results over the next few months.

04:12Key to expanding economic opportunity for all Americans is making the Trump tax cuts permanent.

04:19We look forward to working closely with the members of this committee to pass this bill into law.

04:25Together, we can build a stronger, safer, and more prosperous America.

04:33Thank you, Mr. Secretary.

04:34I now recognize myself for the first questions.

04:37Secretary, let's fast forward a year.

04:39Where do you see the U.S. with respect to tariffs and the overarching strategy?

04:44Do you anticipate all trade deals being bilateral,

04:47or could there be multi-country trade pacts of which groups of countries agree to a tariff schedule?

04:56Mr. Chairman, this will be path dependent on our trade partners.

05:01As I've said before, there are 18 very important trading relationships.

05:06We are currently negotiating with 17 of those trading partners.

05:13China, we have not engaged in negotiations with as of yet.

05:18So I expect that we can see a substantial reduction in the tariffs that we are being charged,

05:27as well as non-tariff barriers, currency manipulation,

05:31and the subsidies of both labor and capital investment.

05:38So that is proceeding very well.

05:42Many of our trading partners have approached us with very good offers,

05:47and we are in the process of renegotiating those.

05:52With the economy, I would say that this is a three-legged stool, trade, tax, and deregulation.

05:59Trade was first.

06:02This House, according to Speaker Johnson, expects to move their portion of the bill over to the Senate

06:12on or about Memorial Day, so we're looking forward to that.

06:18And then deregulation necessarily takes longer to affect the economy,

06:23but I would expect in the third and fourth quarters we would see substantial benefits from deregulation

06:30that by this time last year could be at full force.

06:35We've seen a few numbers discussed in terms of how many countries with whom you have started tariff negotiations.

06:40What is the actual number and what is the status of those negotiations?

06:44How many deals do we anticipate by the end of the year in the first quarter of 2026 or the second quarter?

06:49And what are the biggest challenges you see to negotiating tariffs and getting trade deals done?

06:54Again, sir, approximately 97% or 98% of our trade deficit is with 15 countries.

07:0518% of the countries are our major trading partners,

07:09and I would be surprised that if we don't have more than 80% or 90% of those wrapped up by the end of the year,

07:19and that may be much sooner, that I would think that perhaps as early as this week,

07:26we will be announcing trade deals with some of our largest trading partners.

07:32They have come to us with very good offers,

07:36and what I will tell you is that in negotiating with some of them,

07:42they may not like the tariff wall that President Trump has put up, but they have them.

07:47So if tariffs are so bad, why do they like them?

07:51And then more insidious, we can see that from a practical matter

07:55and from academic research, are the non-tariff barriers.

07:59If you were to look, prior to the escalation, I believe Chinese tariffs are only 5%.

08:05So clearly there's something else going on if they're accumulating these gigantic surpluses.

08:12The president released his skinny budget for the year.

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