(Bloomberg) — President Donald Trump’s top economic officials dismissed investors’ fears of inflation and recession, offering no apologies for the market turmoil sparked by sweeping global tariffs and defiantly insisting a boom is on the horizon.
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On the heels of huge global stock market falls, Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick and others dug in on Sunday and declared that Trump would persist in his tariffs agenda, whatever markets may do.
“The tariffs are coming,” Lutnick said on CBS’s Face the Nation, adding that Trump “announced it and he wasn’t kidding.”
“I see no reason that we have to price in a recession,” Bessent told NBC’s Meet the Press with Kristen Welker, despite economists at JPMorgan saying Friday they now expect the US to slip into a recession this year.
As Trump posted videos of himself golfing in Florida, White House trade czar Peter Navarro said investors should believe Trump’s determination, even if levels change through negotiation. Bessent said more than 50 countries had called the administration, but any talks are going to take time.
“They’ve been bad actors for a long time. And it’s not the kind of thing you can negotiate away in days or weeks,” Bessent said. The US will first have to determine if other countries’ offers were “believable”.
“We are going to have to see the path forward. Because, you know, after 20, 30, 40, 50 years of bad behavior, you can’t just wipe the slate clean.”
Markets were set for another tough week, with US equity futures plunging Sunday. Contracts on the S&P 500 Index dropped 4.6% at 6:02 p.m. in New York, following a 10% drop in the underlying index in two days.
In the two days following Trump’s April 2 tariff announcement, markets shed $5.4 trillion in value and dragged the S&P 500 to the lowest level in 11 months.
Trump urged his followers in a social media post on Saturday to “HANG TOUGH, it won’t be easy, but the end result will be historic.”
Bessent, a former hedge fund manager who built his fortune through his own Key Square Group and at Soros Fund Management, played down the carnage in markets that he described as “organic animals.”
“The market consistently underestimates Donald Trump,” he said.
Navarro predicted that the current swoon in equities would eventually turn into a roaring market. “We will find a bottom in this market quickly,” he told Fox News’ Sunday Morning Futures. “We will hit 50,000 on the Dow easily by the end of this term.”
Outside the Trump administration, others were less sanguine.
Former Treasury Secretary Larry Summers said last week’s selloff was the fourth-largest two-day move since World War II, after the 1987 market crash, the 2008 financial crisis and the 2020 Covid pandemic.
“A drop of this magnitude signals that there’s likely to be trouble ahead, and people ought to just be very cautious,” Summers, a Harvard University professor and paid contributor to Bloomberg TV, said in a post on X.
The Trump team’s comments came the day after an additional 10% duty on all US imports went into effect Saturday. Additional tailored tariffs of up to 50% are due to go into effect on imports from roughly 60 countries on Wednesday. The announced tariffs will take US import taxes to their highest level in more than a century.
Consumer Prices
Kevin Hassett, head of the White House’s National Economic Council, acknowledged that US consumer prices “might go up some,” but suggested that concern among economists, the Federal Reserve and some lawmakers was overblown.
Speaking on ABC’s This Week, Hassett also said Americans will eventually benefit from tax and spending cuts that Trump wants to push through Congress.
Both Bessent and Hassett downplayed concerns that the tariff barrage will stoke inflation, setting up an ongoing disagreement with the Federal Reserve and Wall Street economists.
Fed Chairman Jerome Powell said Friday it’s “becoming clear the tariff increases will be significantly larger than expected,” likely leading to higher inflation and slower growth.
The unified comments from Trump’s top economic advisers on Sunday reinforced the growing view that the president intends to make his tariffs a permanent fixture and sees any resulting economic pain as worth it for a longer-term transformation of the US economy.
Trump believes in the tariff effort and sees it as his legacy to reignite American manufacturing, an administration official said. Trump wanted to do it in his first term and never did, and it’s a core conviction that he’s been talking about since the 1980s, the official said.
The official added that considering the scope and scale of what the White House announced, the market fallout could have been worse.
Agenda at Risk
Trump has said he is moving to reshape the global economy to America’s advantage, arguing that the tariffs will prompt a wave of investment as companies build new factories in the US, bringing jobs and wealth home to the US.
The main target of his ire is a US trade deficit in goods that topped $1 trillion last year. Removing that, Trump and his team say, is a national security priority and will “make America wealthy again.”
Marc Short, who served in Trump’s first term as legislative affairs director and then as chief of staff to Vice President Mike Pence, said markets assumed Trump meant the tariffs as a bargaining chip like in the first administration, but Trump has been hearing different advice this time around.
Short, who like Pence doesn’t support the tariffs, said in an interview Saturday that he expected an eventual “capitulation” by the administration to markets. “But I don’t think it’ll be soon,” he said. “And when it comes, it’ll be framed as a victory.”
As evidence, Short pointed to Trump’s announcement Friday that he may speak soon with the leader of Vietnam about a deal to lower barriers. Vietnam, which was hit with a 46% levy, offered over the weekend to remove all tariffs on US imports.
Short also said a potential recession would risk other elements of Trump’s agenda, including talks in Congress on extending tax cuts from his first term, if Republicans face constituents’ pressure about rising costs.
The search for explanations for the tariffs meant some administration officials on Sunday had to go in unusual directions.
Asked on Face the Nation why the US was imposing tariffs on Heard Island and McDonald Island, a remote territory between Australia and Antarctica which has only penguins as residents, Lutnick quoted Trump as saying, “’Look, I can’t let any part of the world be a place where China or other countries can ship through them.”
(Updates with futures plunging in eighth paragraph)
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