Scott Bessent’s Imaginary Friends
A week ago, Scott Bessent attempted to calm a bunch of bankers by describing that he would take a lead role in negotiations with 70 countries in the wake of Trump’s tariff flip-flops.
He claimed the US still has things called “allies” who would be willing to reach quick deals that would allow him to isolate China.
Bessent said there was great interest in negotiating with the U.S. to lower tariffs, noting that Trump had already spoken with the leaders of Japan and South Korea, and U.S. officials would meet with a delegation from Vietnam on Wednesday.
“I think … at the end of the day that we can probably reach a deal with our allies, with the other countries that have been … good military allies and not perfect economic allies. And then we can approach China as a group,” Bessent said.
He added that the sweeping reciprocal tariffs announced by Trump last week represented a ceiling for tariffs if countries didn’t retaliate, but China had not heeded that advice.
“In terms of escalation, unfortunately, the biggest offender in the global trading system is China, and they’re the only country who’s escalated,” Bessent said.
Bessent is still trying to pitch that PR line — that he has a plan — as in this WSJ article (which among other things, suggests Bessent only came up with this thing he fancies is a “strategy” on April 6, after Trump had already started destroying American credibility).
The Trump administration plans to use ongoing tariff negotiations to pressure U.S. trading partners to limit their dealings with China, according to people with knowledge of the conversations.
The idea is to extract commitments from U.S. trading partners to isolate China’s economy in exchange for reductions in trade and tariff barriers imposed by the White House. U.S. officials plan to use negotiations with more than 70 nations to ask them to disallow China to ship goods through their countries, prevent Chinese firms from locating in their territories to avoid U.S. tariffs, and not absorb China’s cheap industrial goods into their economies.
Those measures are meant to put a dent in China’s already rickety economy and force Beijing to the negotiating table with less leverage ahead of potential talks between Trump and Chinese President Xi Jinping. The exact demands could vary widely by nation, given their degree of involvement with the Chinese economy.
[snip]
One brain behind the strategy is Treasury Secretary Scott Bessent, who has taken a leading role in the trade negotiations since Trump announced a 90-day pause on reciprocal tariffs for most nations—but not China—on April 9.
Bessent pitched the idea to Trump during an April 6 meeting at Mar-a-Lago, the president’s club in Florida, said people familiar with the discussion, saying that extracting concessions from U.S. trading partners could prevent Beijing and its companies from avoiding U.S. tariffs, export controls and other economic measures, the people said.
The tactic is part of a strategy being pushed by Bessent to isolate the Chinese economy that has gained traction among Trump officials recently. Debates over the scope and severity of U.S. tariffs are ongoing, but officials largely appear to agree with Bessent’s China plan.
It involves cutting China off from the U.S. economy with tariffs and potentially even cutting Chinese stocks out of U.S. exchanges. Bessent didn’t rule out the administration trying to delist Chinese stocks in a recent interview with Fox Business.
Still, the ultimate goal of the administration’s China policy isn’t yet clear.
Bessent has also said there is still room for talks on a potential trade deal between the U.S. and China. Such talks would have to involve Trump and Xi.
In the time that Bessent has been pursuing this “strategy” to make deals with our “allies” that will isolate China, Xi Jinping had a showy appearance in Vietnam, where he posed as the guardian of “the multilateral trading system, … the stability of the global industrial and supply chains, and … the international environment for open cooperation.”
Xi also urged strengthening coordination and cooperation through regional initiatives such as the East Asia Cooperation and the Lancang-Mekong Cooperation, the ministry said, citing an article by the Chinese leader published in Vietnam media.
He called such efforts necessary to “inject more stability and positive energy into a chaotic and intertwined world”.
“There are no winners in trade wars and tariff wars, and protectionism has no way out,” Xi said, without mentioning the U.S. specifically.
“We must firmly safeguard the multilateral trading system, maintain the stability of the global industrial and supply chains, and maintain the international environment for open cooperation,” he said.
Last week, China sought to get ahead of U.S. negotiators, holding video calls with the EU and Malaysia, which is chairing ASEAN this year, as well as Saudi Arabia and South Africa, by way of reaching out to Gulf countries and the Group of 20 and BRICS nations.
And Trump has continued to destroy two important American markets that foster the kinds of friendship Bessent plans to exploit: tourism …
… And education:
President Donald Trump says he wants to reduce our trade deficit. Yet he’s destroying one of our winningest exports: higher education.
Colleges and universities are among America’s most competitive international exporters. In dollar terms, last year, the United States sold more educational services to the rest of the world than it sold in natural gas and coal combined.
We also run a huge trade surplus in this sector, meaning that foreigners buy much more education from the United States than Americans buy from other countries. In the 2022-2023 school year, more than three times as many international students were enrolled in the United States as there were American students studying abroad. Translated to cash: Our education-services trade surplus is larger than the trade surplus in the entire completed civilian aircraft sector.
Why? Regardless of what Trumpland claims, America is really, really good at higher education.
Sure, even in spite of the damage Trump has caused to US credibility, the US retains a lot of ways to coerce its, um, friends and allies. Trump and Bessent will have a showy meeting with Japan today — a Japan that might be behind the recent US bond sell-off.
But to get just a sense of the degree to which a lot of US coverage treats the US as the sole protagonist of this story, compare this really fascinating interview with Ursula Von der Leyen.
Sure, like US sources, she brags about the friends that keep calling, coyly denying she’s now the leader of the free world while assuming that mantel.
ZEIT: You have just given the question of whether you are the new leader of the Western world a wide berth. But don’t you have to accept that Europe – the EU, with you at its head – has recently become the most important guarantor of Western values in the world?
Von der Leyen: The West as we knew it no longer exists. The world has become a globe also geopolitically, and today our networks of friendship span the globe, as you can see in the debate about tariffs. A positive side effect is that I am currently having countless talks with heads of state and government around the world who want to work together with us on the new order. This is true from Iceland to New Zealand, from Canada to the United Arab Emirates, as it is for India, Malaysia, Indonesia, Philippines, Thailand, Mexico, and South America. Right now, I could have these conversations 24 hours a day. Everyone is asking for more trade with Europe – and it’s not just about economic ties. It is also about establishing common rules and it is about predictability. Europe is known for its predictability and reliability, which is once again starting to be seen as something very valuable. On the one hand, this is very gratifying; on the other hand, there is also of course a huge responsibility that we have to live up to.
But then, amid questions about whether Europe — the lever that Bessent imagines he’ll use against China — remains friends with the US, Von der Leyen describes “reality [as] a strong ally.”
ZEIT: You have said that you are still friends with America. The problem is, of course, that the Americans are not friends with themselves. Most don’t seem to like Europe very much either. So, what is the US: a friend, a former friend, an opponent?
Von der Leyen: I’m not a fan of these kinds of classifications. There are millions of transatlantic friendships and economic, private and cultural ties that have grown over decades, and you can’t put a label on them. Right now, our relationship with each other is complicated. What is crucial in this situation is that we Europeans know exactly what we want and what our goals are. So, then we are very well placed to deal with the Americans, because they are pragmatic and open and understand clear language well.
ZEIT: The tariff conflict with the US seems to escalate and abate, and we have to wonder what on earth the basis for the negotiations is.
Von der Leyen: Reality is a strong ally. I keep pointing out how much prosperity on both sides of the Atlantic has been created by trade and that tariffs are actually like taxes on businesses and consumers. There are four points that are important to us. The first is that we are seeking to negotiate a solution. In parallel to the negotiations, we are developing countermeasures that focus on trade in both goods and services. All options are on the table. The second point is that we must be very vigilant that Chinese goods do not flood our market now because of the trade war between the US and China. So, we have protective measures in place there. The third point is that we need to build new partnerships and establish broader trade relations. The fourth point is that we need to get rid of the barriers in the single market and deepen and harmonise it.
Then, after reiterating a threat against US digital services that you should click through to read, Von der Leyen contrasts European solidarity with America’s bro culture, the same bro culture that aims to destroy US universities and tourism.
Von der Leyen: Yes, I think people have realised that in times of crisis, solidarity within a strong community is something truly precious, and has helped everyone navigate serious crises better. So whenever we overcome a crisis, this is also a victory for Europe and the European ideal. May I sing Europe’s praises?
ZEIT: Absolutely. To my knowledge, self-exaltation isn’t banned under the European Constitution.
Von der Leyen: Europe is still a peace project. We don’t have bros or oligarchs making the rules. We don’t invade our neighbours, and we don’t punish them. On the contrary, there are twelve countries on the waiting list to become members of the European Union. That’s about 150 million people. In Europe, children can go to good schools however wealthy their parents are. We have lower CO2 emissions, we have higher life expectancy. Controversial debates are allowed at our universities. This and more are all values that must be defended, and which show that Europe is more than a union. Europe is our home. And people know that, people feel that.
There is posturing all around. But Von der Leyen looks so much more like a grown-up than Scott Bessent and his imaginary friends.
It’s not just me saying that.
Even some of Trump’s closest friends question whether Trump and Bessent have any.
While both equally destructive, Trump’s efforts to destroy America’s educational and scientific leadership are at odds with his attempt to gain some advantage out of destroying global trade.
As a result, Donald Trump has left poor Scott Bessent with increasingly imaginary friends.
Update: Paul Krugman focused on the same WSJ story I did and noted the same thing: The US has spoiled its opportunity to do the kind of negotiations Trump claims to want.
Second, even if U.S. negotiators are trying to cut deals with other countries that would isolate China, they will be unlikely to succeed because Trump has lost all credibility. After all, you can’t make deals with other countries unless foreign governments believe that you will honor the agreements you make. Trump has already destroyed U.S. credibility on that front, ripping up all our existing trade agreements, then making wild changes in his own tariffs every few days.
Third, even if Trump’s promises were credible, why would a European government want to join America’s trade war with China, destroying its own supply chains? If the argument is that it’s worth paying the cost of ruined supply chains because that will protect you from Trump’s tariffs, who trusts Trump not to reimpose punitive tariffs on our supposed allies the next time he thinks they’re looking at him funny?
Ralph Waldo Emerson, 1841: “The only way to have a friend is to be one.” Didn’t Mommy teach you anything, Scott?
If Bessent had the same kind of upbringing that Trump did, the clear answer is “No.” Rather, he would have been taught that only no. 1 matters and that other human beings are there to use. Certainly not to be “friends” with since everything is transactional in Trump world.
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Anyone with the least bit of experience within the wide spectrum of international diplomacy during the past seven decades will tell you what a massive leg up it always was the moment you discovered a foreign counterpart had spent time studying at a US educational institution.
During a large meeting at an international institution located outside the United States I once was seated next to a newly arrived ambassador representing an African country with whom relations were often scratchy at best. Presenting an imposing austere countenance he turned to me and whispered his name and we shook hands. A moment later he then somberly leaned into my face and – while I braced myself for the start of a familiar and sometimes well-deserved litany of some sort – he merely pointed to his chest and said only the words “Fighting Irish.”
Not merely ambassadors. Astonishing numbers of heads of state and heads of government were either students or teachers in the USA. I tried to make a list about 40 years ago and have forgotten what the total was but it was a lot.
Some of those names have dropped out of American public consciousness, like Golda Meir.
And I wasn’t even counting the number of military dictators who went through various Pentagon schools.
W.O.P.R.: A strange game. The only winning move is not to play.. … How about a nice game of Chinese Checkers (Chess)?
Eventually which country/block had to test the resolve of the other.
Trump/Bessent’s ploy to coerce with sanctions and then negotiations USA trading partners to have them also taking “action” against China is a strange game indeed. I can’t imagine Mexico, Canada, the EU, and many other “big” players wanting to do that. Limited upside and great face plant downside.
China’s rare earth metals – plus more – block on trade to the USA is likely gonna cause several US industries – including the weapons industry – to squeal big time.
No different than firing willy-nilly government employees and then realizing a big whoops.
These “strategies” trump and bessent keep change so frequently they’re clearly making it up as they go along based on response to each “announcenent”
I also read US tourism loss is estimated to cost .03% of gdp next year. That’s substantial.
I goofed it’s 0.3% loss.
Ah, they would say its the natural ebb and flow of “negotiaion”, that secret sauce Trump slathers on everything. The great unknown is will foreign governments be as mallable as a New Jersey 1-truck subcontractor.
Paul Krugman’s take on Bessent’s little effort is that it’s his way of trying to get Trump to adopt the policy he favors. They make their pitch publicly to try to get through to Trump. Good luck with that.
Or keep it. Prevent Trump from changing his mind every 10 minutes.
I haven’t seen much of anything on the Japanese meeting today. If it went poorly Trump may lose patience.
No surprise there, seemingly baked into the DNA of Japan’s bureaucracy as well as a good negotiating technique, Japan employs obsequious flattery and avoids the headlights so as to persevere core goals.
It’s interesting how they blame everything on the other countries, ignoring the demand from US consumers.
You know what you don’t do to allies whose support you need against China on trade? Impose tariffs.
OT: Judge Boasberg finds Trump administration in criminal contempt of court. Full opinion here: https://storage.courtlistener.com/recap/gov.uscourts.dcd.278436/gov.uscourts.dcd.278436.81.0_2.pdf
This is great. And if any of the guilty are lawyers, or if the Judge finds that the lawyers signed off on the contempt, they should lose their licenses.
Boasberg did not find them to be in contempt—instead, he said there’s sufficient probable cause to do so.
The judge is giving them a chance to state their case.
“ For the foregoing reasons, the Court will find probable cause that Defendants’ actions constitute contempt. It will provide them an opportunity to purge such contempt. If they opt not to do so, the Court will proceed to identify the contemnor(s) and refer the matter for prosecution. A separate Order so stating will issue this day.”
Exactly. When that separate order is issued, then Boasberg will have found them to be in contempt.
Refer them for prosecution, eh? To whom, Pam Bondi, the primary source of the contempt in question?
“ Refer them for prosecution, eh?”
AG plays no role in Bar disciplinary proceedings, which disbarment is a possible resolution.
They will get pardoned
If they are disbarred, at the least, they’ll have to wait until the time period of disbarment is up before they can regain their licenses & resume practicing law.
Great read. “The Court is exceedingly doubtful that the privilege applies here” (p45).
Wonder how many wordings the judge had to go through to settle on this polite version of “i cannot believe you tried that bullcrap in my court”.
I think punitive or criminal contempt needs to be proved beyond all reasonable doubt to a judge, and the accused generally has the same rights as a criminal defendant except for the right to trial by jury. As opposed to summary contempt committed in the presence of the court or civil contempt for remedial sanctions. The court can appoint private counsel to prosecute a case of punitive contempt if the court doesn’t believe the government will prosecute the case zealously. A finding of probable cause would be a basis for the filing of a charge of criminal contempt but not a conviction for it. Boasberg is giving the government the opportunity to cure the contempt before proceeding to an adjudication of punitive contempt.
background here:
chrome-extension://oemmndcbldboiebfnladdacbdfmadadm/https://virginialawreview.org/wp-content/uploads/2020/12/Weisbuch_Book_OnlineUpdate%20(1).pdf
Good grief, speaking of “attempted to calm a bunch of”, Gary Shapley to become 4th acting IRS commissioner in as many months.
I can’t stop laughing over this BS, “A rep for the Treasury says Shapley “has proven his honesty and devotion to enforcing the law without fear or favor, even at great cost to his own career” and will “be a great asset to the IRS” amid reforms….Shapley “brings a profile significantly different from any recent commissioner, entering the job without long experience in the senior ranks of the IRS and starting after sharply criticizing the agency from the inside,” per the [WSJ].”
https://www.newser.com/story/367232/hunter-biden-whistleblower-to-lead-irs.html
Translation: he’ll do what he’s told.
It’s hard to overstate how much criming Trump and Musk are doing to the IRS, if they lose four IRS commissioners in as many months.
True, but Shapley is over the top considering, I believe, going into Hunter’s tax files without permission (if that’s the right word)?
DOGE’s cuts to the IRS were estimated to cost the U.S. $500b in tax revenue. That one thing far outstrips all the savings they supposedly were getting from cutting “fraud, waste and abuse” (translation: government functions that indirectly improved many people’s lives, before DOGE randomly destroyed them).
There was an interesting piece by Ed Kilgore at the NY Intelligencer arguing that the Trump regime’s many attacks on science, health and civil society are all broadly related:
While Donald Trump, in private, holds those who comprise his “base” beneath contempt, his most enduring resentments smolder due to his not being acknowledged as–at least–an equal by “the elites”: the culture vultures, especially in Manhattan society, whose criticism sets high-brow taste and attitudes.
It’s easy to forget that Trump, originally a Democrat, yearned to be admitted to the club whose members included the Clintons, Kennedys, Barbara Walters, and Henry Kissinger–a group whose approval, like that of the New York Times, might appease his bottomless insecurity. (Bottomless because it remained unconfronted, and thus relentlessly reconfirmed.)
His attempts now to subjugate Harvard would be pathetic if he lacked the institutional power to enforce them. It is a fact nearly universally acknowledged that Donald Trump would *never* have been accepted at Harvard, no matter how many people he paid to take the SATs in his place. Harvard (like so many of us) has always seen through Donald Trump, which is why he must now destroy it, or die trying, or destroy everything else in the effort to shut out reminders of his own inadequacy.
I think The NY Times has been doing a fairly good job of reporting on the China tariff complexities. There is an article in today’s digital edition about Amazon and China by Moira Weigel, “Long Live Comrade Trump’s Tariffs”. The Chinese thank past Trump’s tariffs for national building – China. The article talks about how reliant Amazon is on Chinese sellers. More than half of Amazon’s top sellers are in China and the fees paid by third party sellers in China are one of its largest sources of revenues. The vast majority of Amazon products are made in China and American sellers source their inputs from China.
I can imagine Bezos begging Trump for tariff exemptions. Or looking for ways to evade the tariffs.
I have a hard imagining how tariffs can succeed in bringing the type of manufacturing of cheap clothing and home goods that China does to the US. The Chinese government is able to keep wages low. I don’t see Americans wanting to work for those kind of wages.
“I don’t see Americans wanting to work for those kind of wages.”
They *can’t* work for those kinds of wages without making considerable sacrifices to their standard of living — and I mean living on wages lower than that paid to undocumented persons.
We’ve already got a housing shortage most affecting persons in the lowest deciles. How much worse will it be if their wages were forced to drop by 30-50%, or even more, when they are barely scraping by now?
The Broadway musical “Carousel” seems apt. Carrie and Julie were girls employed in the textile factory. They slept in company housing and had curfews. The company fed them, housed them, and paid them wages low enough to make sure they couldn’t save enough to be independent. The only way out was marriage.
I am sure that this or something like this is the paternalistic pipe dream of Musk, Bezos and the rest. Low wages, but the owner feels good because he provides food and housing. Of course, the finance people will make sure the housing and food aren’t very good.
The other reason Carousel comes to mind is that those textile jobs were replaced by machines. And no subsidies to companies would encourage them to go back.
I hadn’t known that about Carousel, thank you. The old Merle Travis tune Sixteen Tons (the daily quota of a coal miner) spoke similarly — “Another day older and deeper in debt … St. Peter don’t you call me ‘cause I can’t go, I owe my soul to the company store.” It referred to the system in which workers were paid not in cash but with scrip that could be exchanged only for goods sold at the company store. And the workers lived in company housing. It took unionization to put an end to it. Written only two years after Carousel — is that the time period when America was Great?
Not just Amazon – every store, everywhere in the US, sells Chinese-made products.
A close friend who works for Gore told me that China has stopped purchasing Gore Tex material that is manufactured in the US. It’s no longer economically viable. Last week an industrial contractor told me that the price of conduit increased by 15% and wire increased by 20%. Anecdotal to be sure, but I have no reason to doubt either account.
The trade war has reduced demand and increased cost for American manufacturers. International tourism has fallen and some estimate that spending by international visitors will decline by $9 billion this year. His assault on higher education will have similar consequences.
A billion here, a billion there, soon you’re talking real money.
Not nine, but NINETY billion!
Heather Cox Richardson mentions that in yesterday’s Letters from an American:
[The sources are listed at the end.]
Ooops, forgot the link:
https://heathercoxrichardson.substack.com/p/april-16-2025
“While both equally destructive, Trump’s efforts to destroy America’s educational and scientific leadership are at odds with his attempt to gain some advantage out of destroying global trade.”.
I am not sure the first destructions are at odds with his global trade policies. The only trade advantage Trump has ever shown a desire for, is for himself and his associates personally. His recent trial run on pausing tariffs verified for him that with just a tweet he can move the markets. Now market timing can be extremely profitable for him personally.
His original trade war in the first administration caused a lot of hardship for America’s farmers. They are his strongest and most important backers. Does he care about them? Or American consumers? It doesn’t appear so. Now he triples down on his tariffs, farmers and supporters be damned.
When it comes down to it, Rick Wilson had it right with Everything Trump Touches Dies.
But Congress and Trump bailed the impacted farmers out. Not because they care about farmers. They care about the farmers’ votes.
The GOP Congress might* need their votes yet. But Trump doesn’t. He let everyone know that if he retakes power, we won’t have to vote again. It is a sure thing that he was serious about that. He will not go away willingly.
Now he is on to attempting to destroy everything in his attempt to become richer than Putin.
They care about the farmers’ silence, ie keeping them quiet.
Why Bessent isn’t going home every night and curling into a fetal position escapes me. Truth be told I said the same about Bernanke in 08 but he had the fusion powered money printing thing to fall back on and fully intended to use it all along. Treasury is different. In all this DOGE nonsense the Treasury is already defaulting on obligations in various ways. The US Treasury is no longer to be trusted. Thus US Treasury obligations are no longer to be trusted. This sort of thing tends to decrease their value. The lower their price, the higher the rate. Not good.
Especially not good when the Treasury is going to have to sell a lot of paper when the debt ceiling thing gets settled. If we make it that far. August? Because even without supply currently, demand is still failing. Higher rates again I will remind. So Scotty has problems. The first is the market problem of selling a lot of paper fewer will buy. That’s the practical problem. The historical problem is that the US Treasury, and its paper, is the core of the world financial system and its wreckage is going to be historic and I hope Scotty’s picture is attached in those histories. Not that he deserves much blame but his stupidity in taking the job deserves infamy. The man that was there to see the US Treasury wrecked.
(But yes, the Fed could try to save it all, but…….)
Well-known economist Paul Krugman got together with Jonathan V. Last to talk about the consequences of Trump’s tariffs: https://www.thebulwark.com/p/wtf-20-trumps-malignant-stupidity
At one point they discuss what it might mean if the world stops using the U.S. dollar as a reserve currency… Krugman argues that the U.S. doesn’t benefit all that much from its special position as the world’s reserve currency, and that it wouldn’t be super bad if the Euro or something else became the new favored reserve currency. The real worry is if nothing replaces it, and the global financial system is just a lot more unstable in the future without a credible U.S. backstop.
The world can’t stop “using the U.S. dollar”, the reserve currency thing doesn’t have much meaning. Enormous amounts of the worlds bank accounts are denominated in dollars. Bank deposits are money. They are extant. You can’t stop using them. They might loose value, but compared to what at this point is the question. Everything probably. Huge amounts of the worlds debts are denominated in dollars and must be repaid in dollars.
There is no crying in baseball and no stop using the dollar in the financial/banking/monetary worlds.
True dat. And as Martin Mayer pointed out nearly 50 years ago, neither the Federal Reserve nor the Treasury controls the supply of dollars.
An entrepreneur in Hong Kong can sell bonds to a buyer in Wuhan denominated in dollars. So long as the entrepreneur is more or less credible, the bonds are fungible from Zurich to Los Angeles.
The exorbitant privilege of being the reserve currency carries special dangers, as Churchill learned when he was Chancellor of the Exchequer.
This is not generally acknowledged in the consensus literature. It is not mentioned, for example, in Barry Eichengreen’s ‘Exorbitant Privilege.’
The dollar will be the world reserve for a long time but the American public might be put in the position of defending that position, and that will not come cheap.