U.S. Treasury Secretary: No Inflation from Tariffs, Plans “Cost of Living Relief Czar” Unveiled

Scott Bessent Outlines Tariff Strategy and Economic Relief Measures / AFP

In a recent appearance on CBS News’ “Face the Nation,” U.S. Treasury Secretary Scott Bessent addressed growing concerns about inflation tied to President Donald Trump’s tariff policies, confidently asserting that these measures would not drive up prices for American consumers. Bessent emphasized that the tariff strategy, a cornerstone of Trump’s economic agenda, would instead pave the way for price stability and introduced an ambitious plan to establish a “Cost of Living Relief Czar” aimed at easing financial burdens on working-class families. This new role would focus on tackling key areas such as housing affordability and car purchase costs, promising significant changes for millions of Americans struggling with rising expenses.

Bessent’s remarks come amid debates sparked by a Peterson Institute for International Economics study, which estimated that Trump’s tariffs could add an annual $1,200 burden per U.S. household (approximately $1,750 when adjusted). Dismissing these findings, Bessent argued that the study’s authors were biased against tariffs, labeling them pessimists with an agenda. He pointed to Trump’s first term as evidence, claiming that tariffs imposed then had no noticeable impact on consumer prices. Instead, he attributed the inflation currently felt by Americans, hovering around 3% as of early 2025, to excessive regulations under the Biden administration. Looking forward, Bessent predicted that inflation would decline steadily throughout the year, swiftly aligning with the Federal Reserve’s 2% target, thanks to deregulation efforts and strategic trade policies.

Delving deeper into the tariff strategy, Bessent suggested that the economic fallout would depend heavily on how trading partners respond. He remained unfazed by China’s role in the equation, asserting that Beijing would absorb the costs of tariffs on Chinese goods rather than pass them on to U.S. importers. “China’s business model relies on exporting to escape its own inflationary pressures,” he explained, highlighting the nation’s economic imbalances and ongoing deflationary struggles. According to Bessent, China would likely lower prices to maintain market share, even under the weight of a 10% tariff increase enacted in February 2025, with Trump recently announcing plans to raise it further by another 10%. This, he argued, would shield American consumers from price hikes while pressuring China to rethink its trade practices.

The Treasury Secretary also addressed tariffs slated for Canada and Mexico, set to take effect on March 4, 2025, unless negotiations alter the course. Initially announced at 25% last year, these tariffs aim to curb what the Trump administration calls unfair trade practices, particularly the flow of Chinese goods through North American borders. Bessent hinted at flexibility, noting that if Canada and Mexico agreed to impose matching tariffs on Chinese imports, the U.S. might waive its levies. “We’ll see if they follow through,” he said, underscoring the administration’s push for a united front against China’s export-driven growth, which he accused of exploiting the post-COVID-19 recovery to flood global markets.

Expanding on the “Cost of Living Relief Czar” initiative, Bessent outlined a vision to target five to eight critical areas affecting American families, with housing affordability and car purchase costs topping the list. While specifics remain sparse, he suggested that this appointee would spearhead efforts to streamline regulations and boost supply in these sectors, easing the financial strain felt by working-class households. For instance, soaring home prices and auto loan rates have become pain points for many, with median home prices exceeding $400,000 and car loan interest rates climbing above 7% in recent years. Bessent framed this initiative as a proactive step to deliver tangible relief, aligning with Trump’s broader promise to prioritize economic security for everyday Americans.

On the global stage, Bessent painted China as a faltering economic giant, desperate to export its way out of domestic woes. “They’re grappling with severe deflation and an unstable economy,” he said, arguing that cutting production in response to U.S. tariffs would be unthinkable for Beijing. Instead, he predicted China would flood markets with discounted goods, effectively neutralizing the tariff burden for U.S. importers. This stance contrasts with warnings from some economists, who foresee retaliatory measures from China already hinted at with threats of counter-tariffs potentially escalating into a broader trade war that could disrupt supply chains and raise costs over time.

Regarding Canada and Mexico, Bessent stressed that their cooperation could reshape North American trade dynamics. The administration has demanded that both nations align their policies with U.S. tariffs on Chinese goods, a move seen as a litmus test for regional solidarity. While no firm commitments have emerged as of early March 2025, Bessent expressed cautious optimism, suggesting that successful talks could avert the March 4 tariff deadline. He also teased a major announcement planned for April 2, involving the U.S. Department of Commerce and the U.S. Trade Representative, targeting mutual tariff strategies not just with North America but with Europe and beyond, signaling a global push to counter perceived trade imbalances.

Shifting gears, Bessent briefly touched on unrelated talks with Ukraine, clarifying that no mineral-specific deal was in progress, contrary to some reports. He described discussions as centered on a broader economic pact, but stressed that progress hinged on a peace agreement an unlikely prospect given Ukraine’s ongoing conflict. “Without peace, any economic deal would be pointless,” he remarked, sidelining the issue as a lower priority amid the administration’s domestic and trade-focused agenda.

Bessent’s bold assurances that tariffs won’t fuel inflation, that China will bear the cost, and that a new czar will ease living expenses reflect a calculated gamble on Trump’s economic playbook. Critics, however, warn that these policies could backfire, pointing to potential supply chain disruptions, retaliatory trade barriers, and persistent inflationary pressures if global partners push back. For now, the Treasury Secretary’s roadmap hinges on a delicate balance of coercion and cooperation, with outcomes that could redefine America’s economic landscape in the years ahead. As the administration rolls out these measures, from tariff enforcement to cost-of-living relief, the stakes remain high for businesses, consumers, and policymakers watching this ambitious experiment unfold.