That's at the Wall Street Journal, April 24:
Scott Bessent: Donald Trump’s Economic Engineer
The Treasury secretary looks ahead to the Beijing summit and discusses AI, energy, taxes, bank regulation and more.
Washington
President Trump has a lot of big goals: completing a grand ballroom and a giant arch, putting a covey of his enemies in prison, winning a Nobel Peace Prize. Most of all, he wants the American economy to roar so loudly that no one can deny it’s the greatest financial power in history.
No one has more responsibility for achieving that goal than Scott Kenneth Homer Bessent, star quarterback of Mr. Trump’s economic team in his rookie season in government. According to many of Mr. Bessent’s former Wall Street colleagues, however, his task has been made manifestly harder by Mr. Trump’s tariffs and the Iran war.
The central components of the Treasury secretary’s agenda include restoring growth after the havoc of war, rebalancing global trade, driving down inflation without choking expansion, lifting real wages for the bottom half of earners, and reasserting American dominance in the industries that will determine the next generation of prosperity—chips, artificial intelligence, energy. His portfolio would be daunting even in peacetime. In the aftermath of a regional conflict and amid a trade confrontation with the world, it is a stress test of both policy and temperament.
In several conversations in his office, Mr. Bessent, 63, speaks about all these global challenges the way a trader might talk about a volatile market: with a mixture of confidence and probabilistic hedging. As he learned early from his macroeconomic mentor, George Soros, and has been reminded by Mr. Trump, risk is something not to be feared, but understood and leveraged. “George Soros is willing to take unlimited market risk,” Mr. Bessent says, “but has incredible survival instincts. The president is willing to take unlimited political risk, but knows when to cut.”
Growth has slowed, but Mr. Bessent insists it will recover. Energy prices will normalize. What he calls the “buffet”—the spread of economic benefits to every household—will still be set out, although delayed from the second quarter of 2026 to the third, perhaps not coincidentally right before the midterm elections that are vitally important to the White House.
China is the most urgent item in Mr. Bessent’s inbox. For all the noise around tariffs, Mr. Bessent’s responsibility is to manage the integrity of the U.S.-China relationship, which will largely define whether the Trump economy is a success. He presents a formulation that sounds simple but contains a dozen tensions: “We have to derisk but not decouple.”
What does that mean? Mr. Bessent sketches a picture that is less rupture than recalibration. Trade continues. American companies still operate in China. The U.S. still sells agriculture, energy, financial services and software. But in three areas—critical minerals, medicines, and semiconductors—America becomes meaningfully independent.
“We’re pretty far along,” he says of rare-earth minerals. “I would say it’s a step function every nine months and probably completely resolved in four years.”
That timeline underscores the central contradiction in Mr. Bessent’s China policy. He insists the coming summit with Xi Jinping is about “stability,” avoiding escalation, keeping the relationship predictable. Yet nearly every concrete move he describes is designed to reduce dependence on the Chinese, thus minimizing Beijing’s leverage.
The recent tariff spiral sharpened the point. As tariffs rose, China deployed nontariff measures, including restrictions on exports of rare-earth magnets. The U.S. responded by applying its own forms of pressure—data controls, technology limitations, student-visa rules. “We have leverage,” Mr. Bessent says, almost casually. “Whether it’s aircraft engines or silicon quartz, the Chinese students, [it] really bothered them.”The deeper view he offers of China is historical, even civilizational. “They believe that they were the Middle Kingdom,” he says, invoking the Qing Dynasty. “I think they want to get back to that equilibrium where the world comes to them.”
This isn’t the language of benign competition but of strategic rivalry and sober mistrust, softened only slightly by the possibility of “peaceful coexistence.” China, he notes, “has never had allies. They have vassal states.”Yet in the same breath, Mr. Bessent argues that the goal of the summit circuit—no fewer than four Trump-Xi meetings this year, including a Xi state visit to the White House in September, the Asia-Pacific Economic Cooperation summit in Beijing in November, and the Group of 20 at Doral, Fla., in December—is to keep relations steady, almost routine. The stakes are “not that high,” Mr. Bessent says, “because everything gets pregamed.” The tension between those two ideas—China as existential competitor and China as manageable counterpart—runs through the entire approach.But the subtext is clear—Mr. Bessent remains staunchly wary, both culturally and commercially. “We founded the World Bank and the IMF,” he says, “whereas the Chinese just want to be part of it and take it over, and they also formed the Belt and Road and the Asian Infrastructure Bank. But I think the difference is we were in it for more soft-power reasons; they are in it for more hard-power reasons.”If China is the casino, artificial intelligence is the table stakes. “If we don’t win in AI,” Mr. Bessent says, “then it’s game over.” He speaks with the urgency of someone who believes the timeline has collapsed. It isn’t five years, or even two, but “a year, maybe 18 months,” before the new technology defines our lives across the board.The implications, as he describes them, are both sweeping and oddly mundane. Entire categories of work could be compressed into a fraction of their current cost. Small businesses could operate with a handful of employees and a suite of AI agents. Productivity gains could ripple across the economy in ways that are difficult to predict but impossible to ignore.....
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