Trump's economic plan: Path to prosperity or peril?

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 trade offensive, which Trump initiated almost immediately after taking office, was aimed at encouraging companies, whose representatives attended the conference in Los Angeles, to choose to invest in the US, build factories in the country, and start production there. Such efforts will be rewarded with tax breaks and deregulation, he added.

- The 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 — all while maintaining a strong dollar - he enumerated.

Bessent emphasised that American financial markets are well-prepared to withstand any short-term turbulence, recalling their rebound after the Great Depression, two world wars, the September 11 attacks, the global financial crisis of 2008-2009, the COVID-19 pandemic, and the subsequent rise in inflation.

"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.

It's important to note that, according to preliminary estimates published last Wednesday by the Bureau of Economic Analysis (BEA), the American gross domestic product recorded its first decline in several years in the first quarter—by 0.3 percent.

The main reasons for this downturn were increased imports, which count as a negative in GDP calculation, and a reduction in government spending. These negative factors were partially offset by growth in investment, consumer spending, and exports. For comparison, in the fourth quarter of 2024, economic growth reached 2.4 percent.

"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 television, in which he defended the decision to implement tariffs and downplayed its 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 US 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.

Tariffs have just started to take effect. Tariffs will make us rich. We will become a very wealthy country," argued the US president.