The Real Economic Cost of Trump Tariffs, Trade War

Treasury Secretary Scott Bessent said that the underlying economy is healthy and there’s no reason for the US to see a recession, while rejecting the idea of assuring there cannot be a downturn.

“I can’t guarantee anything,” Bessent said in an interview Tuesday with Fox Business’ Maria Bartiromo, dismissing any question about assuring there won’t be one as “silly.”

Economists have warned there’s rising risk of an economic downturn thanks in part to uncertainty over President Donald Trump’s tariff hikes, and to worries over their impact once the levies are decided on and implemented.

“What I can guarantee you is there is no reason we need to have a recession,” Bessent said. “We’re seeing some very good underlying data,” he said, pointing to figures from credit cards and banks.

Bessent said there may be a “pause” as the economy transitions from relying on government spending, but the Trump administration is “going to get this spending under control, we’re going to bring manufacturing back home and we’re going to make the country more affordable for working Americans.”

Reciprocal Tariffs

While the Treasury chief cautioned that “I haven’t seen the numbers” with regard to reciprocal tariffs that are set to be announced on April 2, he said the process would involve each trading partner getting assigned a particular duty.

“What’s going to happen on April 2 — each country will receive a number that we believe that represents their tariffs,” he said. “For some countries it could be quite low. For some countries it could be quite high.”

Bessent expressed optimism that in some cases, a country might avoid reciprocal tariffs “because a deal is pre-negotiated.” Other trading partners might seek to negotiate down their duty level after they receive their number, he said.

The Treasury secretary also said his department is working with Congress on legislation further restricting outbound investments into China.

Campbell Harvey, professor of finance at Duke University's Fuqua School of Business, explains how the Trump-led trade war will likely manifest itself in markets and in US policy going forward. Professor Harvey speaks with Tom Keene and Paul Sweeney on Bloomberg Radio.

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