Scott Bessent's Senate Grilling: Tariffs, Trumponomics, and the Economy

As Scott Bessent, President-elect Donald Trump's nominee for Treasury Secretary, prepares to face the Senate Finance Committee this week, investors and economists alike are eager to hear his thoughts on tariffs, Trumponomics, and the broader economic landscape. Bessent, a former partner at Soros Fund Management and founder of Key Square Group LP, has gained favor among investors for his presumed nomination, with markets broadly driving up the stock market following the announcement.



Bessent's views on international trade and investment will be a key focus during his confirmation hearing. Here are four areas senators should consider exploring:

1. The role of international investment in the U.S. economy: The United States has been the largest recipient of foreign direct investment (FDI) in the world for over a decade. Bessent's perspective on the importance of FDI and his plans to attract more investment in the U.S. economy will be crucial for investors and businesses alike.
2. The impact of international trade on Americans: Bessent has criticized previous trade policies for leaving "a trail of devastation through swathes of our country’s heartland." However, real U.S. manufacturing GDP in 2023 was the highest in U.S. history. Senators should press Bessent on his views regarding the benefits and drawbacks of international trade, as well as his plans to protect the interests of American workers and industries.
3. The authority of the President to impose taxes without a vote of Congress: Article I, Section 8 of the Constitution gives Congress the authority to lay import duties and regulate foreign commerce. Previous congresses have delegated the authority to regulate commerce to the president under certain limited circumstances. Bessent should be asked about his views on the extent of the president's unilateral power and how he plans to work with Congress to ensure its views are taken into account.
4. The trade deficit as a security threat: Some of Trump's advisors want him to declare that the trade deficit is a national emergency that justifies broad-based increases in import taxes under the International Emergency Economic Powers Act. Bessent should be asked about his views on the trade deficit as a security threat and whether he supports legislation to allow Congress to vote before new taxes are imposed.