Treasury Secretary Scott Bessent: The Market’s Detox 3/7/25
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This is SquawkPod, and I'm CNBC producer Cameron Costa. On today's podcast, a big interview with U.S. Treasury Secretary Scott Besant. The market and the economy have just become hooked. We've become addicted to this government spending, and there's going to be a detox period. So far, detox has been volatile for the U.S. markets. The president the other night did not mention the stock market at all. But?

Even in the White House, market moves may not be the end-all be-all to success this term. At least, not right now. "He says he's not watching the stock market very closely, are you?" "I watch everything." In an extended interview, the Treasury Secretary covers

Tariffs, tariff pauses, a war on fentanyl flows, the U.S. dollar, and the tension between the U.S. and Ukraine. The sequencing was supposed to be economic deal and then, again, move the Ukrainians closer to the American people, get the confidence of the American people that their money is being spent wisely, and then go and negotiate in a stronger position with Vladimir Putin.

Plus cryptocurrency, a strategic Bitcoin reserve in the making. I am a big proponent of the U.S. taking the worldwide lead in crypto. It has been a busy week, but it is finally Friday, March 7th. You're ready, aren't you? Yes, sir. And you're ready? I'm ready. SquawkPod begins right now. Stand back, you buy in 3, 2, 1, cue, please.

Good morning, everybody. Welcome to Squawk Box right here on CNBC. We're live from the Nasdaq market site in Times Square. I'm Becky Quick, along with Joe Kernan and Andrew Ross Sorkin. And here we are on this Friday that has been a pretty tumultuous week. The S&P is coming off its sixth straight session in which it moved at least 1% up or down.

That's the longest streak of that kind of volatility in more than four years. Yesterday, we did see weakness across the board. The Dow was off by about 1%. The S&P was down by 1.75%. The Nasdaq was down by about 2.6%, 2.8% if you were looking at the Nasdaq 100. And we are talking about some losses that are starting to kind of add up.

just the idea that you're now looking at the s p down by 6.6 percent from its all-time high the nasdaq composite is actually in correction territory if you're looking at that it's off by ten and a half percent the nasdaq 100 which is the the composite that we watch more closely on our boards

it is just below 10%. It's 9.3, 9.75% off. So you're talking about the losses that have started to add up, and maybe it was what the president said yesterday, that maybe has the market on edge. Just the idea that he's not looking at the stock market right now. It's just everything, I think.

I tried to find out from the first term. Do you remember he used the term house money at one point? Playing with house money? Where the stock market hit advance so much that he thought it gave him the opportunity. And we can take more risk. We can ask the Treasury Secretary whether in the back of anyone's mind. I don't know how long, you know, he holds that. I think you get to it every year.

Not every year, but normally there's a 10% correction. Yeah. So it's not unheard of to see that. And we're not there yet with the S&P. We're not, yeah. We're there with the NASDAQ. We'll talk about this a lot.

Treasury Secretary who's coming up. I mean, the thing that struck me, though, is this is kind of putting the markets on notice. I'm not using this as my scorecard all the time. That's what they've been saying in this administration. He did use that the last time around. And that's what his last Treasury Secretary kind of always pointed to when he was on with us. This Treasury Secretary has talked a lot more about the bond market. Well, and so did Trump. Trump did not. The president the other night did not mention the stock market at all. But he called it a big, beautiful drop.

drop in the 10-year, I think, which does help with mortgage rates. It does.

But what if it's down because you're worried about growth concerns, right? That becomes the... But he's going to be not interested in the stock market until he's interested in the stock market. Meaning, you either have to... If it continues this pace, there'll be a moment where you will have to start to grapple with it. Doesn't need to be re-elected, though. And he does... You know, you heard Scott yesterday talking about a recalibration. We'll ask him about that. I want to...

drill down more on the whole notion that, you know, we always ask, what do we ask Treasury Secretaries? Strong dollar. Do they really, really, are they really, really... That's what I was looking at here. Do they really, really want a strong dollar or they kind of sort of want a strong, because I can give you a lot of reasons why a weak dollar would help with what they're trying to do. Sure. For exports, for...

you know, if interest rates are going to come down, you don't necessarily want... It would sort of play into the whole... And they're departing from everything else we've done over the last decades in trade. So why not depart? This is... And then the other question that I was kind of kicking through, the president did also acknowledge in a speech this week to Congress that we could be in for some short-term pain. Yes. What's their idea of short-term? How much pain are we talking? How long and how deep?

How long has this been going on? Right, how long would you tolerate some of those issues too? But it's all things that we're going to talk about with the Treasurer's Secretary when he joins us right here on set. Right here on set. And I like that format so much. You know, the one-on-one, I've seen him do one-on-one. I've seen him do how many one-on-ones? In a dark room with a light and a camera. It's just much better. President Trump issuing tariff exemptions for a variety of goods coming into the U.S. from Mexico and Canada until early next month. The delay...

applies to products covered by the US Mexico Canada agreement USMCA What can you do you you?

S-M-A. Which Trump signed in his first term. A White House official said about half of Mexican imports and 38% of Canadian imports fall under that deal. So the exemptions are going to last until April 2nd when who knows what happens then when the White House plans another round of tariffs.

on a range of countries that there's some reciprocal ones going in. Then I think Trump addressed yesterday the tariffs with reporters in the Oval Office. This is something that we have to do. There'll always be a little short term interruption. I don't think it's going to be big, but the countries and companies that have been ripping us

aren't particularly happy with what I'm doing. But the United States will be very happy. And you know, our farmers are going to be very happy. And again, there'll be disruption. The move to issue the exemptions came two days after Trump hit Canada and Mexico with new 25% levies, though he quickly gave automakers a one-month exemption. You might recall the president said the sharp market response is this week

to the trade news had not impacted his decision to delay the tariffs. The latest reprieve did not include China, by the way. In a news conference today, China's foreign minister said his country would continue to retaliate for what he called arbitrary tariffs from the United States.

President Trump signing an executive order, we've been talking about it, to create a strategic Bitcoin reserve. Mackenzie Segalis joins us now with more. We talked about it earlier, and I don't know whether it's true or not, but it was in the teleprompter, so it must be true. But it was disappointment about the...

some details of the Bitcoin reserve caused Bitcoin to go down yesterday? Yeah, the crypto market has been plunging since last night on that news. Do we know that it was because of what they said? I mean, Bitcoin, you know, was 30% when, you know, does that in its sleep sometimes, you know, over a period. Was there disappointment? If so, what was the disappointment? The

The big expectation was that we would see some sort of Bitcoin purchasing plan in tandem with the announcement of a strategic Bitcoin reserve. But the language in that executive order was very specific about it just meaning that we would hold on to what was already seized in criminal operations rather than roll out any sort of taxpayer dollars into a buying scheme. Who wants that? No one wants taxpayer dollars going into buy.

buy it. Senator Lummis put forth a bill last year where you'd buy one million Bitcoin over the course of five years. You'd hold on to that for 20 years and periodically sell it off to pay down the, you know, multi-trillion dollar deficit. Why? We've sold in the past when we've come across some Bitcoin one way or another. And we sold it when it would have bought a pizza and now it would buy a

you know, a building. Well, that goes to the larger thesis here. Some people are actually pleased to see that we would have this, you know, strategy where the U.S. government would hold on to Bitcoin because the benefit here, the argument is that it would be a hedge against inflation because there's this cap supply of 21 million tokens.

And so if you have that backing up the U.S. dollar, it would protect against inflationary pressures that would hit other fiat currencies. There's also this idea that it would diversify what we already have in our national reserves. You know, other assets like a gold that might be more sensitive to central bank policies. What I will say, though, Bitcoin moves on Fed decisions when the rate goes is hiked or is cut. Bitcoin price response. Plus, you know, governments around the world are not.

um unanimous in believing bitcoin is anything at this point maybe we are there's still people that that don't believe it's a actually a store of value it could there's people that still argue it could go to zero yeah but there are a lot of members of the g20 who might follow suit and i was talking to brian armstrong last night ahead of this summit today and he's one of the you know members who's been advising the trump transition team since the campaign trail and he made the point that he thinks a lot of countries

are going to follow. I know of already Middle Eastern countries, Gulf states that have been looking into a Bitcoin buying strategy. There's also reportedly conversations within the Chinese government to look to follow suit if the government in the US makes this move to roll out a purchase plan. But there is no purchase plan.

Yeah, exactly. Well, I mean, if you have a strategic Bitcoin reserve, you know, China used to be one of the epicenters for Bitcoin mining. It's very easy for them. They have all of this hydro power. And so they already have all the facilities and they abandoned a couple of years ago. But it takes nothing to turn it back on. And then, I mean, similar to Iran evading sanctions by just mining Bitcoin, they already have it on hand. But if we're not really buying it, right, we're not going to be buying it.

You agree with that? I think that right now we have around $17 billion worth of Bitcoin and holding on to that is enough of a signal that other countries would follow suit. I think that there is an intention. I mean, some of the language in that EO did say that if they could find budget neutral ways to add it to our balance sheet, they would investigate that. Now that, of course, stops short of a buying plan, but it signals that they're open to some way to do this if it doesn't take taxpayer dollars. Do you know of a way they could do it without taking taxpayer dollars?

Honestly, I say that because it's the craziest thing I've ever heard in my whole life. Well, what's interesting to me is that President Trump spent a lot of time with Bitcoin miners on the campaign trail. And it goes to that larger thesis of other countries that are turning either sanctioned energy, in the case of Iran, or idle resources into Bitcoin. So that's a way to generate it. And yes, you have the energy inputs. But some of the biggest miners in the world are based in the United States. Core Scientific has a lot of operations across the country. And if it goes to a million, it's a great idea.

If it goes down a lot, it's a horrible idea. El Salvador is one place. And they're getting hit hard by the IMF right now. Right. But which countries are just totally...

Bitcoin non-believers, any of the majors countries? And there are some countries that probably need it more than any other countries because of their problem with hyperinflation. But there are countries that aren't going to do this, at least till it's, you know, the proof is in the... China. Yeah, I mean, there are countries that have flip-flopped, right? If you have countries that subsidize energy power and then you had a bunch of Bitcoin miners come in because they saw a chance to, you know, Kazakhstan, China at one point, to your point, Becky, right?

have had systems where they start to ban the operation altogether or heavily tax it to try to disincentivize people coming in to use this cheaper energy to mine the token. - Okay, thank you, Mackenzie. You could do tax dollars. Might be great. Think about that. - Are you cool with that?

No. The guy who wants lower taxes doesn't want to get rid of the deficit. No, but it would be a way of dealing with the deficit. It's like the idea of whether in Social Security or in retirement plans, whether you stay. Because the government's really good at investing in things like Solyndra? I mean, come on. You don't want to stay. Should you go into equities?

For retirement plans? Yeah, should you go in things that can grow or should you be stuck at 2%? If we're stuck at 2%, we're never handling the deficit. So if Bitcoin could help by going to a million dollars, then it's a great idea. If. Right. I know. Well, people had to buy it at five and many people didn't. Anyway, thank you. Tease will be next.

Don't go anywhere. Next on SquawkPod is today's big interview with Treasury Secretary Scott Besant. We're talking the strategic Bitcoin reserve, the tariffs, the strength of the U.S. dollar and standing firm on Ukraine. President Trump talked about it in its first administration. He talked about it on the campaign trail. He's talked about it since November is the need for Europeans to fund their own defense.

Stick around for a very newsy conversation that happened right here on CNBC.

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Welcome back to Squawk Pod. You're watching Squawk Box on CNBC on this Friday morning. I'm Andrew Ross Zorkin, along with Joe Kernan and Becky Quick. We've got a lot going on. Now to our headline guest of the morning, Treasury Secretary Scott Besant.

it's great to have you here great to have you on the set so i think in general people will call this uh what we're doing kind of a radical departure i think from from decades of what we've seen as far as our global trade policy we're as a leader of the free market world we have always been issued these issues these uh these tariffs etc i think

Can you just make the case that when we come out on the other side of this, we're going to say, wow, it was really, really worth it? I think you started to do that yesterday. You started to talk about what that looks like. Can you fill in some of the blanks on how you see this playing out?

Sure, Joe. And I don't think it's a radical change. It's just a much needed course adjustment. And when we go back and look at what's happened, there's a new paper out called the China Shock. And it talks about what happened post 2004 that some of the communities recovered, but the workers never recovered.

and that it was much more devastating on a human level. And what we are trying to do is make free trade fair trade because the

the trading systems have become incredibly imbalanced. You see it with these gigantic trade deficits that we run. You see it with the big surpluses that other countries are accumulating. So we're going through, we're looking at tariff barriers, non-tariff barriers, currency manipulation, government subsidies. And in the EU, some of these gigantic fines that they're putting on our tech companies just 'cause they see a big pool of capital. And we're gonna push back on those

And at the end of the day, President Trump's been saying tariff is his favorite word. I think reciprocal may be a second favorite word. And we're going to put this at the feet of our trading partners on April 2nd. We're going to come out, talk about who's a good actor, who's a bad actor, to what degree they have put...

They put up barriers against us, and it'll be a choice. Either they can drop all the market manipulation and things like that that they've done that have hurt American workers, and if they do that, then we could have more frictionless trade, or we'll put up the tariff wall, we'll collect a lot of money, and we will make the system fairer. A couple of things. I think you've made the point that unlike...

the printing of too much fiat currency, which might be an underlying cause of inflation. The tariffs don't cause long-term inflation. They could cause some price increases, but not long-term. But then at the same time, you said that Americans don't necessarily just want everything to be really cheap.

They want our workers to be employed here. And that the prosperity here doesn't mean being able to buy cheap goods. It means being able to live the American dream through having a job and having a future, et cetera. So we're going to have higher input costs forever. So what higher input costs forever? No, it's the tariffs are one-time price adjustment. And everything else the administration's doing is...

We're not getting much credit. As of yesterday, energy prices were down 15%. Crude was down 15% since inauguration day. Ten-year rates are down. Mortgages are down. The spreads between the ten-year rate and mortgages have come in. So we saw housing, the...

we saw mortgage applications pop up last week i think if we can keep on that trajectory and joe the the american dream is to be able to buy a house we can't import houses this could all be a reflection of the economy as an investor who who used to spend their day investing in all this stuff do you look at the 10-year do you look at all of the the signs you just talked about wti and everything else and say

that is the work of the government and a newfound confidence in what's happening to the economy, or that's actually a concern about what's going to happen to the economy? Well, I think it's both because we could have the worst of all worlds because look, and I'm not new to this. When I was on your show last time, I've been saying it for six or nine months. I believe that the Biden administration and back

back to Joe's question on working Americans, what is the American dream? But the Biden administration created this bad equilibrium where the top 10% people in this room, probably most of the people watching this show, top 10% of Americans are 40 or 50% of consumption. And that is an unstable equilibrium. The bottom 50% of working Americans have gotten killed.

We are trying to address that. We're trying to get rates down. And could we be seeing that

this economy that we inherited starting to roll a bit, sure. And look, there's going to be a natural adjustment as we move away from public spending to private spending. The market and the economy have just become hooked. We've become addicted to this government spending, and there's going to be a detox period.

There's going to be a detox. I think that that temporary pain that you've acknowledged, that the president has acknowledged. I think the question becomes, is temporary pain the new transitory inflation? How do you know that we get to the other side of this and how long do you think it actually takes? Well, look, there's an adjustment. We'll see whether there whether there's pain. What we are trying to do is.

I talked about it at the Economic Club of New York yesterday. We are trying to transition from public to private. I talked about we are going to have safe and sound regulation to get our banking system going again. So the banks should be generating loans to private companies,

Employment should be from private companies, not from government. And I'm confident if we have the right policies, it'll be a very smooth transition. Let me ask you this. I was with a whole bunch of CEOs last night, and they were talking about investing in the United States, a question about bringing manufacturing back here, what the tariffs would do. And there's sort of a very interesting almost behavioral science question.

question, which is how long do the tariffs either have to be in place or do people have to believe that they are there and permanent forever before the companies decide, OK, actually, we are going to invest, knowing or thinking that maybe they're actually going to come off later? How do you think about that? Well, look, I think that most CEOs and

Tariff is the word of the moment, but I actually think what is going to determine the corporate behavior is going to be do we have good tax policy? Can we make the Tax Cuts and Jobs Act permanent? Are we creating energy security so that they have the

access to cheap energy, are we going to deregulate? Which is another big story of what happened the past four years. The rationale for tariffs, it's jumped around a little bit. And I can give you, I wrote a few down. Fentanyl is why we're doing this, I guess, currently with Mexico. And

And Canada. And China. They supply the precursor ingredients for fentanyl. Reciprocal trades, you even have some of the skeptics kind of go, well, that makes some sense. I want to bring in domestic manufacturing, obviously what you've talked about. Trade deficits? Yes.

Do you view those as inherently bad? I know the president always points to that, but we do consume and we're always going to consume more than the rest of the world. And if you do indeed want a strong dollar, it seems like it's something we're going to have to live with. A couple of other ones, punishing bad behavior, security concerns with China. That's a whole slew of reasons to put on tariffs.

And it just at this point, I guess critics would say it looks a little haphazard the way they go on. They come off. We we talk to Mexico and Canada. OK, we talk to the automakers. They don't want us to do it. So we're not going to do it. It just seems like it's being levied in a somewhat haphazard way. Is that is that not fair? Of course, it's not fair, Joe. But that's what you all do. Not all.

Look, it's not linear. It's an organic process. But if we were to look back to a similar process over what President Trump's talked about in its first administration, he talked about it on the campaign trail, he's talked about it since November, is the need for Europeans to fund their own defense. All of a sudden, voila, this week,

This week, after 25 years of baiting and conjoling, President Trump achieved what five other presidents couldn't achieve. The Europeans are going to up their defense spending. The German debt break is coming off. That was not a linear process. That was not always an attractive process. But now the Europeans say that they are going to pay their fair share. I mean, this could all make sense in terms of the art of the deal. I mean, I could see it.

working, but I could also see it not lasting months or even years, the tariffs. I could see, because it does seem near term, it could be disruptive to the stock market. It could be disruptive to the bond market. It could be disruptive to the economy and to jobs and everything else. But if there's a method to it where maybe they don't go on April 2nd, if the president gets what he wants,

is are we necessarily going to be in a tariff world for the next four years? Well, look, I think some level of tariffs are going to be necessary just given... Long term. Well, we'll see long term, but just given the level of imbalances. The other thing, too, is if we take China,

China is the most imbalanced, unbalanced economy in modern times. They have a very different economic system than we have, and we have let them export their economic system to us, which has resulted in lower wages, loss of the manufacturing base. One very good example would be, as you could see, President Trump is scouring the earth to make sure that we have our strategic and critical minerals. That's great.

But 85% of the refining of those and processing happens in China. Every time a Western company sets up a processing firm, Chinese competitors drop their prices and put them out of business. How connected, in your mind, are the tariffs to the later conversation you're going to be having this year around taxes? Meaning that you need the tariffs to deal with certain budgetary issues. And then, of course, the question is going to be,

what

what the tax piece looks like. And then, of course, the next question is going to be whether the tariffs then stay on to capture whatever savings you're trying to get so that you can make the budget work. Right. So, Andrew, I was in the investment business for 35 years. I thought I understood how crazy CBO scoring is. And now that I'm on the other side of the wall, I can tell you it's really crazy. And it's very unlikely that we are going to get any credit in the CBO scoring for tariffs.

But if you look back, the China tariffs, which the Biden administration has kept on, has brought in hundreds of billions of dollars. And so we will be able to, those are going to continue, likely go up, and then we'll see what the other levels are. But in terms of the actual budget negotiation, tariffs won't be part of the pay-fors. It will be something that's in the background.

I think people wonder, you've laid out a whole lot of reasons why there's unfair trade around the globe. But I think people wonder with why start with Canada and maybe even Mexico first. Just the idea that they tend to be better trading partners. We had a former U.S. ambassador, Bruce Heyman, the U.S. ambassador to Canada earlier this week. He said, you guys went after those three because that's where the money is.

because he thinks it is going to be used. It's money you need. You need to be able to show and start bringing that money in. And that's why them first. Yeah, no, the reason it's first is because of fentanyl crisis. That, you know, I'd have to vigorously disagree with Ambassador Hammond that it's the fentanyl crisis on the southern border, on the northern border, and all these precursor drugs from China.

I call it a radical departure. Maybe it's not really a radical departure. I want to talk about the dollar and wonder whether

There's the slightest crack in what we've had from every Treasury Secretary. We always ask them the same thing over the years. I've been here so long, been through so many Treasury Secretaries. I've never heard a Treasury Secretary say that they're not for a strong dollar. But a weak dollar would really be an answer to a lot of what you're talking about here in terms of trade deficits, in terms of

We know what a weaker dollar does for future obligations that we have with 37 trillion in debt. That makes it a little easier. Lower interest rates implies probably a weaker dollar. Would you accommodate a weaker dollar at all? Is there any motivation at all to let that happen? Or do we have to sort of...

the strongest dollar policy that we've ever had. There's no change in the strong dollar policy, but I can tell you when you think, what does a strong dollar mean? There's the Bloomberg Currency Index and the dollar is very strong on that. Then there are bilateral trading relationships. And is the dollar strong or weak on that? And is it strong because of U.S. fundamentals? And I can tell you, we...

We are commit this administration President Trump are committed to the policies that will lead to a strong dollar if we bring back more manufacturing if we have cheap energy good tax policy deregulate we will end up with a strong dollar but what is unacceptable is in a bilateral relationship other countries trying to weaken their currency and so we are against

the excuse me currency manipulation on a bilateral the basis but globally the the strong dollar is very important we will continue as a reserve asset and i um i i think any anyone who has an inclination that this administration thinks differently on that's wrong as far as the um

the president paying attention to the stock market or the equities market or not paying attention. We in the past we thought that that is how President Trump

at some point gauges his success as president. Now, he doesn't need to be reelected this time in four years. The market's been up 20% in the last two years, obviously. So is there any perception with him that he's playing with some house money? He said that at one point in the past. And I guess what I'm getting to is how long or what type of levels on the S&P do you think you would need to see where he might

that might influence some of his policymaking decisions? Look, President Trump takes in a lot of information every day. Stock market's part of it. That, again, as somebody who was on the other side for a long time, and you say, oh, where's the Trump put again? There was no Trump put? Well, there's no put. The Trump call on the upside is,

If we have good policies, then the markets will go up.

he says he's not watching the stock market very closely are you i i watch everything but and okay what's your what's the best put i mean you are going you know how the media covers things and we're we're down six percent on the s p from what you read on a daily basis it's feels like we're down 60 at times although the nasdaq is down uh in correction territory at this point i'm just wondering what if we

If we ever went down 20% on the NASDAQ or 15% on the S&P with people that want Trump to fail, that's going to be splayed across every newspaper in the world. I'm just wondering whether the tolerance for something like that for the administration. Well, look, as you said, Joe, market was up 20% last year. So there is some house money. No, no, no. I'm going to put it another way. Did the Biden administration succeed?

the american people weren't buying it just as a market was up they voted out but they voted out the democrats question relates to the regulatory or deregulatory agenda which i think is part of arguing on a long-term basis is going to help the economy there's two things that i'm fascinated by one is that it sounds like the f_t_c_ at least and the administration is thinking of trying to extend or at least

be very similar. I mean, that's to what the Biden agenda was before. I don't know. And that was sort of some of the commentary about sort of what the next version of regulations look like, which surprised me. The second thing that I was surprised by was actually mergers and acquisitions activity in the month of January, which I would have thought would have been up quite

but actually was down 30% as if January was back in 2015 and what that says about the confidence to the extent that you believe that M&A activity is a barometer of confidence. Well, Andrew, MAGA doesn't stand for Make M&A Great Again. But I think that, again, with deregulation, with the more thoughtful oversight at the FTC, and I think the two...

new leaders at the top are very thoughtful that we will see a pickup in corporate activity. I think what we've seen over the past 60 days or the past six weeks since President Trump's been in

It doesn't tell us very much. And again, what will we have seen? I've been meeting with a lot of banking heads, investment bank heads, and I think that things are going to loosen up.

Mr. Secretary, can we just talk a little bit about the Democrats got voted out in spite of the big run ups in the market? And I think a lot of that was because of inflation and because what average Americans were feeling at the grocery store, at the price of the pump, what they were paying for insurance, what they were paying for housing and rent.

We did hear from a lot of CEOs this week who said that the tariffs could lead to price hikes almost immediately this week and next week. The CEO of Target talking about prices for fruits and vegetables that we rely on so heavily on Mexico this time of year. Best Buy saying that they would see price hikes that would go into electronics. Automakers saying you could see price hikes pretty significantly by next week even.

I just wonder how much tolerance you think there is from the American people. You're trying to help the bottom 50 percent of workers. They feel those inflationary prices and it hits home a lot harder. Well, Becky, we'll see how the overall inflation numbers work out. That obviously energy is a big component. So we'll see that go down.

Committee to unleash prosperity Steve Moore's group has some very good data on how regulation affected the average household So if we're cutting that so that that's why I keep urging people to look across the entire spectrum if you get a one-time price adjustment and the other thing too is are we going to for

the bottom 50% of wage earners, can we see real income gains for working Americans? Because I think that was the problem last time, that the top 10% did great and the bottom 50% got crushed. So if they start seeing real wage gains because the private sector, as opposed to the government's producing the jobs, then I think that would be a big offset.

The other night, President Trump said that he wanted to balance the budget as well. So we're going to have the big, beautiful bill eventually, maybe. And I guess the 2017 tax cuts, would you like to see those extended permanently at this point? If you add in where I'm getting to, if you add in a lot of the other tax on tips, no tax on Social Security, add it all in, you're not going to get anywhere near a balanced budget unless there's some cuts. I don't know whether Doge does it.

What about Medicaid? At this point, it is the one, I don't know if you want to call it an entitlement, but it's been growing, outpacing Medicare, outpacing Social Security, and it may not be doing what it was designed to do at this point. It's doing a lot more. At least states have tried to get it to do a lot more. It's any Medicaid cut

on the table? Well, I don't know if it has to be a cut, but certainly... Slow down in the increases? Well, slow down in the increases or just looking at the system and the empowering states. We had a governor's conference two weeks ago at the White House, and a lot of the states would prefer to do it themselves. And I'm sitting in the most prolific state for the Medicaid, and New York...

Illinois, Chicago are big spenders. So could more states get more money? Some states have to rein in the overspending. Sure. What else would get us anywhere near a balanced budget if we have all these tax cuts? Well, growth.

If we change the growth trajectory, again, as I was telling Andrew, that when I was on this side of the wall with CBO, I think it doesn't hit anyone. The CBO scoring assumes 1.7, 1.8% growth linearly. So if you hike taxes, growth doesn't move. If you cut taxes...

The growth doesn't move. So I think if we make the current tax regime permanent, then we will grow if we...

deregulate as we're planning to do and if we re-industrialize. Is that a precursor for saying we're not going to look at the numbers or you're not going to look at the numbers from what the CBO says in terms of what the budget's going to look like? It may not look balanced according to their numbers, but it may be something that you guys say, forget it, we're not paying attention. Well, if someone were always wrong, would you look at the numbers? I think they were a trillion and a half off in the last scoring. When you had your meeting with

President Zelensky, and we've talked about this. I don't know whether you're Treasury Secretary, state. I don't know. I think you're a little bit of all those things. And you've got- Joe, it's 100% Treasury Secretary. I know. But you were over there. And I just want to get a feeling because was that last Friday? Was that when that- The meeting was last Friday. A week ago. Yeah.

So there have been disruptions in maybe the way we approach global trade and also maybe in what our allies think of this in terms of security across Europe, the Russia-Ukraine situation. I wanted to get your comments. Did you think he was going to sign? Were you under the impression that when you were there that the deal was done and he was going to sign? Zelensky. Zelensky. And did you...

Were you treated badly? Can you give us an idea of behind the scenes what happened in that meeting? In Kiev? Yes. Yeah. So I thought it was very important for...

for me to go to Kyiv and speak with President Zelensky in person in his office. We had a vigorous discussion for 45 minutes or an hour. He did not want to sign the economic partnership agreement there. I explained to him that the purpose of the agreement was to bring the Ukrainian people closer to the U.S. people.

that we wanted part of President Trump's peace plan was to show no daylight, no daylight between Ukraine and the US. So he did not want, he chose not to sign the deal that day. I asked him, I said, we're going to go out there. There are 50 reporters. What do you want to say? And he said, I am going to tell them that I will sign in Munich.

that he was meeting with Vice President Vance and Secretary Rubio. He didn't sign the deal in Munich. So then the Ukrainians requested to come to the White House and wanted to sign the deal. And what do you think was going on, though, in his mind? You think he was pushing this out because he thought he could get a better deal? He thought that was punitive? What was he? I think he has this recursive loop of

these two words, security guarantee, security guarantee. And the security guarantee is twofold. One, that as the U.S. has more of an economic stake in Ukraine and the success of the future of Ukraine, because I tell you, like this deal, there is nothing for the U.S. if the Ukrainian economy doesn't succeed. So there's an economic, an implicit economic security guarantee. And

Prior to his visit on Friday, President Trump had hosted President Macron of France, Prime Minister Stammer of the UK. These were fantastic meetings. The European leadership, to the extent they are the European leadership, was on board with a plan for the Europeans to provide troops on the ground the security guarantee without Americans.

The American troops and the NATO backstop starts at the Polish border. And President Zelensky kept pushing for this security guarantee. But I tell you, this was one of the most epic on-goals in diplomatic history.

All he had to do, come in the White House, have a press conference. We were having a private lunch. If he wanted to try to renegotiate, that would have been the place to do it. Not on worldwide TV. And then we were going to go sign the deal. He says he'll sign it now. Where do things stand? Well, he said he signed it two other times. Where do things stand? What's going on behind the scenes? Well, we're going to have to see. The sequencing was supposed to be economic deal. And then, again...

again, move the Ukrainians closer to the American people, get the confidence of the American people that their money is being spent wisely, and then go and negotiate in a stronger position with Vladimir Putin. So now I think after President Zelensky's performance last Friday, we're going to have to see that he is in favor of a peace deal. Can I ask a question just about Russia? Do you imagine over the next couple of years that American businesses will return to Russia as part of

whatever ultimately happens here? - Andrew, again, the situation's very fluid and everyone is kind of jumping to the next thing, that there is definitely a peace deal. President Trump wants a peace deal. He is working hard and he acknowledges that you have to speak to both sides. And look, he's behind the scenes, he is negotiating just as hard with President Putin, but you can't negotiate with him if you don't speak to him.

Given what happened with you in Kyiv and then with what you said was going to happen in Munich, I would think that maybe the president and the vice president, that didn't occur in a vacuum, what finally happened last Friday. I mean, they knew full well what had transpired at that point. Does that explain maybe how things went sideways so quickly?

No. Look, I... Were you treated well in Kiev? I heard it was a dark room, that he was... I don't know, there were some arrogance. Look, I think President Zelensky, understandably, is under a lot of pressure. A lot of pressure, because I can tell you, in his office, the whole building's dark. And there's sandbags in the building because they're afraid of a drone getting in the building. It's all security.

Yeah. So, I mean, you think you have a lot of security in Times Square. And but he, I think, has to acknowledge that the security guarantee is coming from the Europeans. Have you spoken to him since? Sorry? Have you spoken to him since, President Zelenskyy?

When he came to the Oval, sure. No, I mean, have you spoken to him since last Friday? Well, I don't speak with President Zelensky, and I have not been in touch with my counterpart, the finance minister. 100% Treasury, I think. Although you just gave a pretty good summary. All Treasury, all the time. Of what went on. Isn't being in business with Ukraine in the mineral business, is there an implied security there? Does Russia not...

understand that there's an implied security arrangement there with the United States? Joe, so it's not only a mineral deal. It's an energy deal and it's an infrastructure deal. And my view of what do the Russians think about this is, so to get to Kiev, you fly to Poland, take a 10-hour night train in, that four hours before I arrived, for the first time since November, the Russians bomb Kiev. So I believe...

One person died, four were injured, including two children. And so I believe that that's what the Russians think of this deal. They don't like it. - I'm gonna ask you just a different question. Maybe this is a political question or a philosophical question.

There are some critics of what we're doing as it relates to minerals with Ukraine who say, you know what, the work that the U.S. has done with Ukraine was done on behalf of democracy, was done as a gift, that it wasn't a quid pro quo for some kind of economic situation, and it wasn't something that...

I don't know if you believe that the terms of whatever the deal are too tough on Ukraine, but what do you say to those people who say, you know what, we've gotten a benefit by supporting Ukraine thus far, even without genuine economics this way?

Well, I would tell them to look at the deal, which most people haven't seen, can't see yet. And let me tell you what the deal is not. It's not one of these rapacious Chinese deals where we come in, we don't have any mineral rights, we don't have any... This is an economic development deal. So this is...

To the extent I've said a lot, I said in my speech at the Economic Club of New York yesterday, economic security is national security. We want to help Ukrainians succeed economically. Poland, which sits next door to Ukraine, Poland and Ukraine, when the Iron Curtain came down, had the same size economies. Poland is three and a half or four times bigger now. And

I'll tell you who doesn't like this deal is the Ukrainian oligarchs who tend to have their hand in the till. So we want to make sure that the money goes to the Ukrainian people.

You've got to be able to talk about everything, Scott. OK, Bitcoin, the reserve. Supposedly, there is disappointment that we're not going to be buying Bitcoin outright using taxpayer dollars. But if we can do it in a in a revenue neutral way, we would. Number one, are we a proponent for the reserve? And two, is there a way to buy Bitcoin, not just Bitcoin?

acquire it through, I don't know, however we've gotten these $17 billion worth at this point. Yeah. So Joe, I am a big proponent of the US taking the worldwide lead in crypto. I think we have to bring it onshore and they use our best practices and regulation. I think that the Bitcoin reserve, before you can accumulate it, you have to stop selling it. So what we have now is from a seized asset pool and I

I wasn't there when it happened, but I believe what happened was about 500 million of Bitcoin was seized, half of it was sold, and what we have now that, say it's over 10 billion, 10, 12 billion, that's all through appreciation. So the first thing to do is to put, is to stop the selling. So we are going to, after the

the victims are paid and all of that, we will, any seized assets will go into this reserve. And then we'll see what the way forward is for more acquisitions for the reserves. And we're starting with Bitcoin, but it's an overall crypto reserve. So how do you think about buying, though? And how should taxpayers think about that? Because effectively, we'll be levering ourselves to some degree, given that

we don't have a surplus of money right now to make these investments. Yeah, so that's why the first step is to stop selling. And then we're going to put a plan in place from there. So...

We're having this crypto summit. I'm going back to Washington this afternoon, and then we'll talk about the way forward. Can I just ask you about the IRS? It's the largest bureau of the Treasury Department, and Doge has come up with a plan to cut about half of the 90,000 workers there, about 45,000. The president was very clear this week that it's the secretaries who run the departments, not Doge. I just wonder if you agree with a cut of that size there,

particularly when there have been points raised and studies done that suggest that for every dollar that the IRS spends on enforcement and trying to go after bringing in revenue brings in about $5 to $12. Yeah, I'm not sure where this cutting half the employees came from. What we did was there were...

15,000 new employees. We did an evaluation. We kept about half. The ones that, Becky, to your point, were deemed essential to collections. Somehow the other 7,000 United States of America collected taxes for 250 years without them. And look, this is playoff season for us. Game day is April 15th. And I have three priorities with the IRS.

the collections privacy and customer service in that order so there's nothing nothing i'm going to do to hurt the collections over time we are in the midst of this great ai boom and you know i think increasing head count now would be just the wrong time as

The private corporations are moving into AI. And I can't think of a better application for AI than audit auditing tax returns. How are tax returns this year so far? We don't have the data about the other thing, too, is when you ask about physical employees, 90 percent of the filing is now done online. Yeah.

I guess we started with tariffs. Maybe we should maybe end with tariffs. There's a piece in the Journal today about the president's ability constitutionally to levy tariffs and that he has invoked some emergency powers in the fentanyl case to do it. But the Journal...

is basically questioning whether, if you don't use fentanyl as a reason, that whether a U.S. president can unilaterally levy tariffs. Do you have a view on that? Well, Joe, if you want, I could geek out for you. Oh, I would love that. Yeah, we love geeks. It's my natural habitat. So what you're seeing now, the tariffs...

based on the fentanyl at the border is something called IEPA. That's an emergency statute. But there are 301s, there are 232s. There's a whole range of actions. Jameson Greer just came in

was confirmed last week as USTR. He has a lot of experience and deep knowledge of the legalities. I am sure that he will be by the book. I think that there were 4,000 legal challenges to President Trump's tariffs last time that withstood the test of time. So, yes, it's not...

the administration doesn't have the ability to say, "Let there be tariffs," but everything we do is based on a specific rule of law that we will invoke. Every time you finish something, I'm thinking about something else that I want to ask you. I don't know where Alex is, but can we go a little bit longer? -Fine. -Really? All right, well, the show's over at 9:00. I don't know what to do. I got to get to the crypto summit. China.

Would you ever say that, that we're ready for a trade war? We're ready for any kind of war? I thought that was a little bit strange to hear that coming from China. And I guess where I'm going is, in a perfect world, if we could be

rivals in terms of business with China, but loyal trading partners, or at least trading partners, it would benefit both countries. Does the president want to get there eventually with China? Well, look, I think he wants to get to fair trading, and we're a long way off. And

Again, I will point to look how he has gotten the Europeans to finally pay their fair share on the global defense budget for the Western alliance. So can we China needs to rebalance. So

they have been exporting their economic practices to us. Can we use tariffs to push back against that and force a or encourage a rebalancing which almost every economist believes needs to happen? And so the China relationship is very complicated.

because in the past, our economic partners, our biggest economic partners were also our allies. We are now military rivals with China and economic rivals. So it's very tough to disaggregate that. So are they using their big surpluses to build up for this big military buildup? The answer is yes.

Could they tone down their military ambitions? Maybe. But again, I like to stay in my economics lane and there's a lot to do there in terms of to get to fair trade. And again,

that I would say that anyone who is commenting on this doesn't understand that the surplus country is the one who will see the most problems in a trade war. The deficit country will do better. I don't know. You seem very comfortable talking about that.

You and Rubio, I think there should be like a hotline. What should multinational companies who do business in China think? So I know Apple, of course, has a lot of business in China. They've now made a big pledge to do a lot of business in the U.S. But does that change the dynamic in terms of will they ultimately get a carve out on tariffs? There's lots of other businesses that invariably do business in China as well. Well, I...

I know that Apple is diversifying their supply chain. They made a big push into India. We've seen Vietnam pick up as a trading partner. So we are already seeing corporates take action. I'm on the record as saying I think the only good thing to have come out of COVID was it was a test run for what could happen if

we really got into a deep economic war or the unthinkable happened and we got into a kinetic war. So everyone has realized that optimal supply chains are not reliable supply chains. Do you think that President Xi will make a move on Taiwan? I asked, by the way, there was some very interesting comments by Elon Musk earlier this week where he even seemed to suggest that there was a relationship that maybe this would actually happen sooner than later.

I follow President Trump's lead, and he is confident that President Xi will not make that move during his presidency. One more newsflash I think we wanted. That's what we live for. Thank you for all the time that you gave us today, Mr. Treasury Secretary. Thank you. Good to see you. Great to see you. Come on back, please. Good. Look forward to your book. Thank you very, very much.

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At Comcast, our commitment to the military community goes back to our founder, U.S. Navy veteran Ralph Roberts.

Today, we honor his legacy by partnering with organizations to help veterans, transitioning service members, and military spouses succeed in today's digital world. Delivering the internet connection, skills, and support they need to advance economic mobility and open doors to new opportunities. Visit ComcastCorporation.com slash military to learn more. Comcast, proudly supporting our military community because your service matters.