Trump’s economic plan: Tariffs aim to spark investment revival
The Treasury Secretary, Scott Bessent, assured on Monday that Donald Trump's plan, including a new tariff policy, tax cuts, and deregulation, aims to boost long-term investments in the United States.
Bessent spoke at a conference organised by the Milken Institute think tank in Los Angeles. "The primary components of the Trump economic agenda - trade, tax cuts, and deregulation - are not standalone policies. They are interlocking parts of an engine designed to drive long-term investment in the American economy," he stated.
He also argued that the tariff drive, which Trump initiated almost immediately after taking office, was designed to encourage companies—whose representatives were present at the conference in Los Angeles—to invest in the US, build factories, and start production domestically. Such efforts will be rewarded with tax breaks and deregulation, he added.
- he American people should expect to hear the engine humming during the second half of 2025. With all pistons moving, we’ll see more jobs, more manufacturing, more growth, a more robust national defense, higher wages, lower taxes, less-burdensome regulation, cheaper energy, less national debt and less dependence on China, he enumerated.
Bessent: American markets will endure it
Bessent emphasized that American financial markets are well-prepared to survive any short-term turbulence, recalling their recovery after the Great Depression, two World Wars, the September 11, 2001, attacks, the global financial crisis of 2008-2009, the COVID-19 pandemic, and subsequent inflation rises.
"Each time the American economy gets knocked down, it gets back up again. And it gets back up even stronger than it was before," said the Treasury Secretary. "U.S. markets are anti-fragile. Indeed, the entirety of our economic history can be distilled in just five words: 'Up and to the right,'" he added.
The American economy contracted
As a reminder, according to preliminary estimates published last Wednesday by the Bureau of Economic Analysis (BEA), the American gross domestic product recorded a decline in the first quarter for the first time in several years, by 0.3 percent.
The main reasons for this downturn were increased imports, which in GDP calculations represent a negative value, and a reduction in government spending. These negative factors were partially offset by growth in investments, consumer spending, and exports. By comparison, in the fourth quarter of 2024, economic growth reached 2.4 percent.
Trump defends his decision
"I don't want anything to go down, but sometimes you have to take medicine to fix something," said Donald Trump in April, when asked about the potential impact of his trade policy on the American economy.
Meanwhile, last weekend, Trump gave an interview to NBC, in which he defended the decision to implement tariffs and downplayed their long-term effects. "I'm just saying they [children - ed.] don't need to have 30 dolls. They can have three. They don't need to have 250 pencils. They can have five," Trump stated, defending the decision to implement strict tariffs. He referred to statements from a cabinet meeting earlier in the week, when he dismissed concerns that the imposed tariffs would lead to supply shortages in the American market.
Trump also downplayed the possibility of a long-term negative impact of the tariffs on the American economy, even if the United States experiences a recession in the short term. "Look yes, everything's okay. What we are — I said, this is a transition period. I think we're going to do fantastically," he said.
