Scott Bessent defended tariffs and argued for tax-cut extensions during his confirmation hearing as President-elect Donald Trump’s pick for Treasury secretary in the Senate Finance Committee. 

No Democrats committed to support him on Thursday, and they expressed skepticism at some of his testimony. Republicans praised Bessent and in the GOP-controlled Senate, the investor is on track to be confirmed soon after Trump is inaugurated. 

Trump has “a generational opportunity to unleash a new economic golden age that will create more jobs, wealth and prosperity for all Americans,” Bessent said.

Here are some takeaways from Bessent’s confirmation hearing:

Tariffs

Bessent didn’t avoid tariff talk and gave some indication what to expect from the Trump administration’s use of trade levies. 

Trump’s tariffs will generally be used for three purposes, Bessent said under questioning from Sen. Todd Young (R., Ind.). The first would address “unfair trade practices” by foreign nations, such as tariffs Trump imposed on China and the duties he levied on steel from various nations in his first term. 

Broader tariffs could also be a “revenue raiser” for the federal budget, Bessent said. Congressional Republicans, along with many in the incoming administration, hope to use tariff revenue to offset some of the costs of extending Trump’s tax cuts. 

Finally, tariffs can be used for negotiating tools, sometimes for nontrade objectives, Bessent said. Trump recently threatened to impose 25% tariffs on Canada and Mexico if they didn’t address issues at their borders with the U.S. Those tariff threats may be used in lieu of economic sanctions that Bessent said Trump believes sees as overused.

Bessent tried to assuage concerns that Trump’s tariff proposals—particularly his pledge for universal tariffs on imports—could boost inflation, arguing that currency fluctuations and the behavior of foreign exporters would limit price increases. 

Under a 10% universal tariff, Bessent argued the dollar would increase about 4%, so the tariff wouldn’t be fully passed through to consumers. Additionally, foreign manufacturers—particularly in China—could cut their prices to preserve their market share, further limiting the impact of the tariffs on consumer prices, he said. 

Bessent also said he would push China’s government to live up to the terms of the Phase One trade deal it signed with Trump during his first term. The Biden administration didn’t enforce provisions that would have compelled China to buy American farm goods, Bessent said, pledging that he would begin pushing for them to live up those commitments if confirmed, and potentially pressure Beijing for a “catch-up provision” to cover the past four years. He also didn’t rule out a carbon tariff as part of a larger trade package.

Taxes

Bessent’s comments on taxes echoed core GOP positions. 

“We do not have a revenue problem in the United States of America. We have a spending problem,” he said, delivering a line frequently used by Republican members of Congress.

Bessent repeatedly stressed the importance of extending the tax cuts that expire at the end of this year and warned of the economic consequences if those cuts lapse. Taxes would go up on most households, and Bessent called the looming expiration a pass/fail exercise for Congress. 

“It would be devastating, especially for small businesses,” Bessent said. 

Democrats repeatedly pointed out that higher-income households would get bigger benefits as a share of their income or a share of the total tax cut, but Bessent gave no ground. 

Sen. Raphael Warnock (D., Ga.) probed the limits of Bessent’s no-tax-hike stance, asking whether he would accept letting the tax cuts expire above $400,000 in income, $1 million, $10 million or $1 billion. He didn’t budge, saying that upper-income households need incentives for investment.

Changing Biden policies

Bessent ticked off a few ways he plans to change Biden administration policies.

He said he would work to reverse the global corporate minimum tax agreement that Treasury Secretary Janet Yellen negotiated in 2021. The agreement, reached without Congressional approval, sets a 15% floor under corporate tax rates around the world. But companies and Republicans say the administration ceded too much of the U.S. tax base. 

Bessent also said he would push Treasury employees to work in their offices rather than remotely. 

He was adamant about the need for more sanctions targeting Russia and their energy industry. Bessent told Sen. Mark Warner (D., Va.) that as Treasury secretary he would move ahead with further sanctions on Russia if Trump supported the idea.

Keeping Biden policies

In some cases, Bessent signaled less change from current policy.

He said he would let the IRS’s Direct File system operate for this tax filing season, which starts Jan. 27. The program, started last year, lets taxpayers use a government website to guide them through tax preparation and filing. Tax-software companies and Republicans oppose the program, but Bessent said he would study it before deciding whether to pull the plug. 

Although he was generally dismissive of the clean-energy tax credits created by Democrats in the 2022 Inflation Reduction Act, he expressed openness on an advanced manufacturing credit from the law. Pressed by Sen. Catherine Cortez Masto (D., Nev.), Bessent said he was unfamiliar with the so-called 45X tax credits for renewable energy components, batteries and critical minerals, but is generally supportive of efforts to produce more rare earth minerals in the U.S.

Fed independence

Bessent said the Federal Reserve, at least on policy, should be independent from the influence of the executive branch. He pointed specifically to the Federal Open Market Committee, which is responsible for steering U.S. monetary policy.