EDITOR’S NOTE: In this exclusive Fox Business interview, Treasury Secretary Scott Bessent sits down with Larry Kudlow at a G20 gathering to assess the U.S. economy under President Trump. Bessent highlights a surge in manufacturing, construction, energy production, and AI-driven investment that he credits to tax cuts, deregulation, and a push to onshore critical supply chains. The conversation frames the moment as an economic boom not seen in decades, with the United States positioning itself as both an energy and AI superpower. Read the full transcript of this interview below:
Introduction
LARRY KUDLOW (00:00:00 – 00:01:14): Thank you very much. I’m Larry Kudlow with Fox Business. It’s a great honor to be here today at this G20 meeting.
Just a word about my good friend Scott Bessent, who is the 79th Treasury Secretary, as you know, and as I have said on several occasions, is the best, most important wartime Treasury Secretary since World War II.
We’re here in North Carolina in a beautiful setting outside of New York City, outside of Washington, D.C., just to say that America is a beautiful place. We had the World Soccer Cup and the returns. All those people that came here just loved it. This is a beautiful country and we pledge allegiance to this country. And it’s not all in Washington or New York City.
Scott Bessent hails from South Carolina, as you may know. His family goes back hundreds of years, but he also has a place near here in North Carolina. So we’re in this very beautiful setting.
Having said all that, let me introduce the 79th Treasury Secretary, my friend, Mr. Scott Bessent, the Honorable Scott Bessent.
SCOTT BESSENT (00:01:22 – 00:01:23): Morning, Larry.
LARRY KUDLOW (00:01:23 – 00:01:25): How did I do? How’d I do? Did I get it out?
SCOTT BESSENT (00:01:26 – 00:01:28): Keep trying, you’ll get it right.
The American Economic Boom
LARRY KUDLOW (00:01:28 – 00:03:26): Thank you. I’ll do my best. So thank you for this. I appreciate it very much. It’s a great honor. We’re broadcasting live for Fox Business.
Scott, I want to begin. Newspapers are running a very odd story, as though Treasury debt management or retiring some off-the-run long bonds is the most important economic event. And it is not. And I want to make that as clear as I can.
The most important event right now in the American economy is we are in an economic boom. We are in an economic boom, the likes of which we have not seen probably for decades, if we’re being honest about it.
And I want to also add that this boom in large measure is a function of President Trump’s policies and your policies, particularly the one big beautiful bill, the tax cuts, the 100% depreciation. We are seeing manufacturing growth that we haven’t seen in years. We are seeing construction growth that we haven’t seen in years. We are seeing employment growth in those areas. We are seeing a phenomenal AI revolution that is building out our advanced technologies. It is the envy of the world. We are seeing a massive stock market rally. We are seeing enormous profits, which are the mother’s milk of stocks. And the lifeblood of the economy.
To me, these are the headlines. You’ve been trying to get that out there a number of times. Media doesn’t like to talk about the successes of the American economy. But I want to begin with that because to me, that’s the headline story.
SCOTT BESSENT (00:03:27 – 00:04:17): Good, Larry, and thanks for coming down. This is a great part of the world. Blue Ridge Mountains out the window here. Asheville had a terrible tragedy about 2 years ago, Hurricane Helene, and these are resilient people. I grew up coming up here, as you said, have a house about an hour away, and to be able to showcase both this part of the country — and I hope all the G20 attendees will come back. I hope the people who are seeing Asheville and western North Carolina around the world will come visit.
And Larry, it’s exactly as you said. If we look at the composition of the bond yields, it’s the inflation expectations are flat to down.
LARRY KUDLOW (00:04:17 – 00:04:19): Right. And right.
SCOTT BESSENT (00:04:19 – 00:04:20): This is a growth story.
LARRY KUDLOW (00:04:20 – 00:04:21): Growth.
Growth, AI, and America’s Global Position
SCOTT BESSENT (00:04:21 – 00:06:40): Growth, I believe, is reaccelerating. We’ve had some very good discussions here over the past few days. And everyone agreed that growth has been better than they thought it would have been given the Iran conflict. Now, everyone is always cautious going forward, but growth has been better.
And as you said, the US sits at a very special place in the world because we are the AI superpower and we are pulling away. The amount of compute that the US has relative to global compute, we’re going to go up from about, call it, 60% in 2025. By 2028, the US will have 80% of global computing power here, which is just extraordinary.
And as you said, the president’s policies have laid the groundwork for this economy. So we have regulatory certainty. The President tasked this administration with cutting the regulatory burden, and that’s part of what we’re talking about here today. With the G20, with the 20 most important economies in the world and other countries that we’ve invited because we view them as systemically important and allies that come with us and grow — because regulatory certainty, tax certainty, and energy certainty, because the US is also the world’s energy superpower.
We are now exporting energy to the rest of the world. So I don’t think that we are in any kind of a dire situation. And as I said yesterday, the U.S. bond market has been the best performing bond market.
What happens over a month doesn’t matter. But for August, it was. And since President Trump came into office, since January 20th, 2025, it’s been the best performing bond market among major countries in the world and the best performing stock market.
LARRY KUDLOW (00:06:40 – 00:06:58): And stock market — I say this all the time. Profits are the mother’s milk of stocks. Profits drive the economy. Front page of the Wall Street Journal yesterday, they finally ran a profit story. I’ve been waiting for this. This is the business newspaper of record, finally ran it. Front page story.
SCOTT BESSENT (00:06:58 – 00:07:03): Well, it’s more of a features paper now, so — and it’s not the Main Street Journal.
Profits, CapEx Boom, and the One Big Beautiful Bill
LARRY KUDLOW (00:07:03 – 00:07:52): I know, but profits year on year — hang on a second — profits are up 53%. For the S&P 500, profits per share, 53%. Now, I read some of the economists on Wall Street. They’re looking for future earnings of 25% year on year.
Now, as you just said, let’s go back to the one big beautiful bill, all right? You have 100% depreciation. You write off your expenses. So we are in a CapEx boom. Nothing like it around the rest of the world. We are in a CapEx boom — machinery, equipment, buildings, of course, the AI construction.
You did a tweet. What was it? 105,000 job goods-producing jobs year to date. That was a very important tweet.
SCOTT BESSENT (00:07:53 – 00:07:59): And Larry, too, that the preamble for the manufacturing jobs are construction jobs.
LARRY KUDLOW (00:07:59 – 00:07:59): Right.
SCOTT BESSENT (00:08:00 – 00:08:34): So we are seeing, thanks to the tax bill, 100% expensing on equipment, 100% expensing on factories, and 100% expensing on ag structures. We are having a CapEx boom in factories. And that the precondition for that is construction jobs.
My hometown, Charleston, South Carolina, Boeing is doing a 50% increase in their factory there, which produces the Dreamliners. That will be 1,000 great-paying jobs. But before that, they’re construction jobs.
LARRY KUDLOW (00:08:34 – 00:08:34): Yes.
SCOTT BESSENT (00:08:34 – 00:08:59): And so we are seeing this construction boom. And I don’t know if you saw the other day, the construction unions came out and pushed back against the data centers. The construction unions came back and pushed back against the data center backlash. Right. And they said, we will go after anyone who attacks these because these are great projects.
Manufacturing Orders and Energy Production
LARRY KUDLOW (00:09:00 – 00:09:47): Manufacturing orders, okay, non-defense capital goods excluding aircraft, last 3 months, 16.2%. Shipments, last 3 months, 16.7%. Backlogs, 9.2%. Year on year, 13% increase, okay? We’ve never seen anything like this before.
So here’s my point. Tax incentives work. That’s important. Tax incentives provide growth. Deregulation provides growth. Drill, baby, drill. We are now, according to the Energy Department, at 13.8 million barrels per day, on our way probably to 14.5 to 15 million barrels next year. That’s from the Energy Department. They have a little thing.
SCOTT BESSENT (00:09:48 – 00:10:18): Well, Larry, the other thing too is that I had my 3-3-3 program and on the energy portion, it was the 3 million barrels per day of crude equivalents. And right now, if we think about crude, natural gas, all the other adjacent fuels, we are already up about 1.6 or 2.2 million barrels a day since the president’s inauguration.
LARRY KUDLOW (00:10:18 – 00:10:18): Right. Right.
SCOTT BESSENT (00:10:18 – 00:11:13): So we’re well on our way with massive exports. And the other thing, too, here, Larry, is that this AI boom — for the first time, we had private sector participants at a G20 yesterday. And we had pharma executives and manufacturing executives and more than talk about their businesses, they talked about how they are integrating AI into them.
And it was fascinating to see the ecosystems that are developing, the productivity, the higher level of precision manufacturing, both across their supply chains and their customer bases. And I think that we’re just at the beginning of this. And this is, as you said, this is where the jobs are created.
Private Sector Growth and Wage Increases
LARRY KUDLOW (00:11:13 – 00:11:33): We have seen a decline in government jobs since the president came in, 370,000 decline, and private jobs up just about 900,000. It’s a restructuring, a restructuring of the Biden big government socialism, which is promoting growth, this restructuring.
SCOTT BESSENT (00:11:33 – 00:12:42): And that’s why one of the reasons we’re seeing the bottom 25% on the income ladder has seen the highest wage increases, 4.7% wage increases, just like the president. The president did it again, just like he did in his first term, because the private sector is what increases real wage growth.
So we are seeing this boom and we brought in these private sector executives to talk to the group about what they are seeing. There’s also in Chapel Hill going on the tech track, which Commerce and the White House Technology Office are running, and they’re also showcasing our great tech executives. President took a group of executives to Beijing for the state visit. And it really is that the US — we want to set the guardrails, create the incentives, and then let our private sector go because that is really where a nation’s wealth is created.
Free Enterprise vs. Socialism
LARRY KUDLOW (00:12:42 – 00:14:13): So with all this, I just want to make a generic point that I think is very important here. Here in the United States, we’re operating a free enterprise — this is free market capitalism. It is producing with incentives and choice and competition. We do not need a socialist economy.
My good friend Newt Gingrich calls it big government socialism. We had a dose of that in the prior 4 years. And we had virtually no growth and a 21% cumulative inflation rate. We’re still feeling the hangover from that cumulative inflation rate. That was a dose of big government socialism.
There’s a lot of loose talk in the elections about socialism. It doesn’t work. Free enterprise works. That’s why the numbers are very important to back up the general points on the economic boom. That’s why I’ve taken some time on this to make sure that you get your message out. We don’t need socialism.
And I think also Trump’s policies are an example for the rest of the world because they should grow as rapidly as we are growing. Growth solves a lot of problems, but growth comes from free enterprise and market competition. Not from a statist government.
SCOTT BESSENT (00:14:14 – 00:14:47): And look, if I look back, Japan implemented Abenomics in 2012, 2013. And one of the most important aspects of that was the deregulatory aspect, was the corporate sector getting more efficient in the private sector jobs. And as I’ve said over the past few days, I think Abenomics was a restructuring the economy, reflationary program. And now I think Japan can sit back and enjoy the benefits of that.
Free Enterprise Spreading Through the Western Hemisphere
LARRY KUDLOW (00:14:48 – 00:16:05): I was talking last night at dinner. We’re seeing the people that finance ministers are sitting next to at your head table. So we’re seeing free enterprise move through this hemisphere. Very interesting. A lot of overturning of the left and socialism, moving back towards free market economics.
Argentina is probably the best example, but by far not the only example. I sat next to the finance minister of Poland. He was talking about the reforms. I sat next to the finance minister of Italy who was moaning and groaning that he can’t get his reforms through, but he had the right idea. We’re seeing this now.
I’d like to see more of it in Europe. I think Europe is too sclerotic. I think it needs a dose of deregulation, probably needs lower tax rates as well. But my point here is, with all this talk about socialism, I don’t know where it comes from. We have a prosperous free enterprise economy and we go into the elections. It’s going to go beyond the elections. These are such important changes and it works. The point is, the theory is no good if the facts don’t back it up. What I’m saying is the facts do back it up.
SCOTT BESSENT (00:16:06 – 00:16:40): Look, I agree. And we’ve seen some great examples. I think we have a generational opportunity in the Western Hemisphere. As you said, it was led by Argentina and the reforms there. Everyone said it couldn’t be done and now we are seeing the inflation drop, the change in economic circumstances.
And Larry, I thought what was most interesting — and when you talk about socialism here in the US, when we look at the demographic of those voters, they are overeducated and underearning.
LARRY KUDLOW (00:16:41 – 00:16:41): Yes.
Trade, Economic Statecraft, and Supply Chain Security
SCOTT BESSENT (00:16:41 – 00:17:09): So these are underachievers who are, who are jealous of those who want to go and work every day. And if you were to dissect the last election that President Milei had, that it was the poorest segment of society and the young people who came out and voted for him. Right. But as you said, we’re seeing Argentina, we’re seeing Bolivia, we’re seeing Colombia, we’re seeing Chile come back, Ecuador. And I think we could see many more.
LARRY KUDLOW (00:17:10 – 00:18:27): I do, too. Let me switch gears slightly. I want to talk about trade. And a brilliant speech you made at the Economic Club of New York a month or so ago. You called it economic statecraft, which was very important. Let me just read, then I want you to talk about it.
“The first and foundational principle is that economic security begins with national capacity, the ability to build, invent, finance, and scale the industries that that will define the next century.”
You talked about semiconductors, artificial intelligence, quantum computing, and advanced technologies. And one key point you made, and perhaps this is the absolute central point, is we must, in our trade relations, we must never leave the country with a foreign choke point from abroad.
And this is the heart of the reciprocity trade policy. That Mr. Trump has put into effect. We started it in the first term when I was there. It’s continuing in the second. There must not be choke points. And we have to be as strong as we need to be. Nobody likes protectionism, but there has to be reciprocity. And onshoring has now become an important theme for our whole economy.
De-Risking Supply Chains and Critical Industries
SCOTT BESSENT (00:18:28 – 00:20:44): Larry, as I’ve said many times, the only good thing about COVID— and we were just talking about your experience in the White House during the COVID crisis. The only good thing was that it showed us where many of the choke points are.
And I often say in our trade discussions with China that we do not want to— we don’t want to pull apart from them, but we have to de-risk. We have to de-risk. We have to de-risk everywhere in the world.
We could see the Iranians are trying to use the Strait of Hormuz as a choke point. It’s not a choke point for the US, but it is a choke point for many, many other countries. And but that will be bypassed in 2 years. In 2 years, the Strait of Hormuz will be like a worthless piece of water that the oil will be going on pipelines across land.
But we’ve seen we have semiconductors, it’s critical minerals, it is the advanced— it’s the precursors for many of our medicines. I mean, I think probably everyone in this audience and everyone on TV who is listening to you has a— has had a child that has had amoxicillin. We do not produce amoxicillin here in the U.S., so we have to do that.
And look, sometimes the people who say let the market work, the market will sort it out— well, there are market failures. There are market failures. And I think what we’ve learned is that maximum efficiency is not maximally secure.
And under President Trump’s direction, there are a group of us in the administration who are securing all these critical nodes in the supply chains. And again, whether it’s critical minerals, whether it’s semiconductors, we’re trying to bring 35% of the semiconductor production, the advanced semiconductor production back into the US by the end of the president’s term or by the end of the decade, which is very important.
On Investment and Economic Boom
LARRY KUDLOW (00:20:44 – 00:20:50): I think it’s interesting. I know, sometimes the president embellishes just a wee bit.
SCOTT BESSENT (00:20:51 – 00:20:53): Your words, not mine. Your words, Larry.
LARRY KUDLOW (00:20:53 – 00:21:36): Just the occasional embellishment. But when he talks about trillions, trillions of dollars being invested here, whatever the exact number is, his point is well taken. There’s money coming from the Middle East. There’s money coming from Europe. There’s money coming from Asia. We see this. This is part of the economic boom.
We have the incentives. The idea is onshoring, and this is part of the reciprocity trade. I think it’s a success. And you have said— look, he has said, you have said— trade security, economic security, national security all go together. It’s of a piece, and people have to realize that.
Craftsmanship, Industrial Capacity, and Onshoring
SCOTT BESSENT (00:21:37 – 00:22:34): Agreed. And it’s important when we think about that, everyone thinks about the ability to build things. Well, not only is it important to have a steel industry, it is important to have the tradition of craftsmanship like that. That’s what in World War II, the private industries that the US went over to military footing. And we were able to do that because we had the workers and the skills to do that. We need to make sure that we still have that in the US. And I think we are going back to that.
This is not some antediluvian notion that the, we’ve moved into a different thing where we can just have consumer products and financial services, that we— there are certain things that we need to onshore or nearshore.
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