Bessent Lays out Plans to Reshape Global Trade

U.S. Treasury Secretary Scott Bessent Thursday laid out the Trump administration's ambitions to reshape international trade relations using tariffs, roll back financial regulations on American banks, and use sanctions on Iran to collapse its economy.

President Donald Trump has begun an "aggressive campaign to rebalance the international economic system," Bessent told the Economic Club of New York. "The American Dream is rooted in the concept that any citizen can achieve prosperity, upward mobility, and economic security. For too long, the designers of multilateral trade deals have lost sight of this."

In regard to Iran, he said the new administration would exert a campaign of maximum pressure of sanctions to choke off its oil exports and put pressure on its currency. "Making Iran broke again will mark the beginning of our updated sanctions policy," Bessent said.

Trump's international trade policy on Thursday continued to evolve after he gave Mexico a one-month reprieve on 25% tariffs imposed earlier this week on any goods that fall under the United States-Mexico-Canada Agreement on trade. The outlook for Canada, whose goods, apart from those in the energy sector, are also subject to a 25% tariff since Tuesday, was less clear, though Commerce Secretary Howard Lutnick had earlier said a comparable exemption was likely.

Bessent said tariffs would deliver benefits on a number of fronts.

"One, it is a good source of revenues. Two, it protects our important industries and their employees. And three, (Trump has) added a third leg to the stool and he uses it for negotiating," Bessent said.

The "substantial" revenue from tariffs will help pay for tax cuts for earners in the bottom 50%, such as no taxes on tips, Bessent said in remarks meant to push back on criticism of tariffs as a regressive tax that punishes lower-income households.

Bessent also signaled a broad push to deregulate the banking sector. He said he plans to use the Financial Stability Oversight Council to drive change in financial regulations that are unduly burdensome to banks and to fix a "broken supervisory culture," coordinating via Treasury rather than consolidating agencies.

One focus for banking supervisors should be to analyze supplementary leverage restrictions, he said.