Transcript: Scott Bessent’s Interview @ WEF in Davos -Jan 20, 2026

So the plan is to go ahead with the trade deal. Of course the President has said that on February 1 he will implement a 10% tariff if the Danes do not want to give up Greenland. And it is on the eight countries that sent troops to Greenland.

NATO Alliance and Defense Spending

Maria Bartiromo: So what do you want to say about the NATO alliance then? I mean, Denmark has been a long ally. The European Union united against any move. How do you progress with what looks like a strategic move for the United States, but also preserve the alliance, the NATO alliance?

Scott Bessent: Well, look, I think that the NATO alliance is very significant, safe, sound, and thanks to President Trump, it’s never been more secure. When President Trump came in in his first term, the European countries and Canada were not meeting their spending quota as percent of GDP. Now they are. They got a lot of catch up to do.

And Maria, to put it in perspective, the United States of America since 1980 has contributed $22 trillion more dollars or spent $22 trillion more dollars on defense than all of NATO. So roughly the same size population, and we have spent $22 trillion more. That is two-thirds of our outstanding government debt.

Europeans have been spending the money on social welfare, on roads, on education, and it’s time for them to pay more, which they’ve agreed to do.

Maria Bartiromo: Yeah, many of them have already stepped up, like Poland.

Scott Bessent: Everyone has, except Spain.

Maria Bartiromo: Okay, and do you not feel that a security deal in the Arctic would suffice in terms of Greenland?

Scott Bessent: Well, I think what we’re seeing with a base that we have shared with the UK for many years, the UK is signing the island over to Mauritius. So again, I can see why the President believes that for U.S. engagement, we do not want another Diego Garcia on our hands.

Tariff Revenue and Deficit Reduction

Maria Bartiromo: This is a very important point that you make in terms of tariffs. How much money has been generated from tariffs already? Certainly the hysteria over President Trump’s tariffs have died down since April of last year. What is the total running rate right now?

Scott Bessent: Yeah, it’s in the hundreds of millions of dollars, Maria. The U.S. for the fiscal year which ends September 30th, we had a fiscal contraction. For the calendar year, we had a very large fiscal contraction. So we cut the deficit by about $200 billion.

The important number is the deficit to GDP. So calendar year 2024 was 6.9%, the highest we’ve ever had. I mean, we inherited a mess. 6.9%, the highest we’ve ever had when the U.S. was not at war or not in a recession. So 6.9%. Calendar year 2025, 5.4%.

I have called for getting that number down to 3% by the end of President Trump’s term, and I think we’re on the way.

Maria Bartiromo: So you’ve been using that tariff money to pay down the deficit.

Scott Bessent: It feeds into the general account and it’s been a big part of it. And again last year the U.S. ten year bond was down about 40 basis points. I believe France was up about 40 or 50. Germany was up 50 or 60. U.S. bond market had its best performing year since 2020.

And again back to your point that after Liberation Day, April, May, it’s the end of the world, the world’s going to sell U.S. assets. Just the opposite happened. As treasury secretary I can see who the buyers are of our bonds and we had more foreign participation than ever.

Maria Bartiromo: And just to be clear, a moment ago when I asked you about the market reaction, you don’t think markets rates are spiking on this Greenland story. You think that what’s happening in Japan is specific to Japan?

Scott Bessent: Well, I think that the Japan situation, that the market there again had a six standard deviation move and that was happening before any of the Greenland news. And I think the rest of the world, German rates are up, French rates are up, Japanese rates are up a tremendous amount.

Supreme Court and Tariff Authority

Maria Bartiromo: Secretary, I want to get to the macro story in a moment, but let me stay on tariffs for one more moment because we could be hearing from the Supreme Court imminently. And of course the Supreme Court will issue a ruling on the president’s use of tariffs during a quote “emergency,” the IEEPA reason that you’ve actually issued some of these tariffs.

What are your expectations for the Supreme Court? We could hear from them this morning or even tomorrow morning. If they rule against you, what are the alternatives to raise that kind of revenue? Hundreds of billions of dollars that you’ve already been able to do?

Scott Bessent: Well, Maria, I think it’s very unlikely that the Supreme Court is going to strike down a president’s signature economic policy. It didn’t early on with the ACA, also known as Obamacare. They reinforced that recently.

And the real problem here is President Trump has used IEEPA for negotiating leverage for geopolitics in emergency situations. If we look back, the first IEEPA tariffs were fentanyl tariffs. So on Mexico, on Canada, on China. And if fentanyl is not a national emergency, I don’t know what is. 100,000, 200,000 Americans dying every year.

And because of that, Mexico came to the table, Canada came to the table, China who exports the precursor drugs have all come to the table and we’re seeing a substantial drop in protecting the American people.

On October 8, the Chinese government announced rare earth export controls on the entire world, not just the U.S., which would have caused an industrial meltdown. President threatened 100% tariffs on China if they did this. My Chinese counterpart, who’s been a very good interlocutor, had gone quiet for a couple of days.

Chinese immediately came to the table, and they rolled the export controls out a year. And President Trump insisted that I negotiate on behalf of the whole world. So in terms of the U.S. leading, this is what U.S. leadership looks like. He was able to use IEEPA tariffs to negotiate for the entire industrial world. So I think it’s very important here.

China Trade Relations

Maria Bartiromo: I’m glad you mentioned China. I’m going to come back to China. But while we’re here, what is the latest timetable on the much anticipated bilateral trade deal with China?

Scott Bessent: I had a meeting with my Chinese counterpart here in Davos last night, Vice Premier He Lifeng. He told me that just this week they have completed their soybean purchases and we’re looking forward to next year’s 25 million tons. I suggested maybe he’d want to buy a little more, because President Trump always brings that up with Party Chair Xi when they speak. And they’ve done everything that they said they’re going to do.

Maria Bartiromo: Are they having rare earth magnets flow, or are they putting restrictions on that? Because there were reports last year that the Chinese were saying, we will send the rare earths, but we’re not sending them to any companies that are tied to the defense sector and the U.S. military.

Scott Bessent: They are flowing as expected. We are in a fulfillment rate that’s in the 90s, which I think is quite satisfactory.

Maria Bartiromo: So they didn’t stop, even if it’s a defense company, because I believe they tried to do that with Japan as well.

Scott Bessent: Well, Japan and China have gotten in a skirmish over some remarks that the Japanese prime minister made. So the U.S. is immune from that.

U.S. Economic Performance

Maria Bartiromo: Okay, let’s talk macro. The U.S. economy seems to have been doing much better than many expected. We had a 4.3% read in GDP last quarter. How would you assess the United States economy?

Economic Growth and Tax Policy

Scott Bessent: I think that it is very strong and likely accelerating. And just to be clear, that 4.3% GDP, there was private sector GDP, so, or actually after the fiscal contraction. So the real number was 4.7. The government contracted by 0.4. So that got us to 0.3. So that is pure private sector GDP.

And President Trump’s economic policy, tax deals, trade deals, and deregulation. The deregulation, which I think is probably the most powerful part, is really just starting to kick in now. So we have the tax deal, one big beautiful bill done on July 4, which no one said could be done. And it contains the full expensing for U.S. Corporates on equipment, for factories, for ag structures.

On the other side, for working Americans, the President’s signature policies. No tax on tips, no tax on overtime, no tax on Social Security, interest deductibility, auto loans if you buy an American car. So we’re seeing this wonderful balance between industrial America and Main Street America.

I am also the IRS commissioner and we did not change the withholding guidance. So we’re going to, as commissioner, I can see there are going to be very substantial tax refunds coming to working Americans in the first quarter. They’ll change their withholding. They’ll get a bump up in real incomes because of the expensing. We’re seeing 12, 14% CapEx growth in the U.S. and historically, you have never seen a capex boom without seeing employment follow.

Maria Bartiromo: You’ve got a capex boom and a productivity boom as well. 4.7% is much better than so many people expected last year. Are you expecting the economy to at one point hit 5% as well?

Scott Bessent: Well, the Atlanta Fed GDP now number, which a very noisy number, is now reading 5.3 because remember the fourth quarter GDP included the Schumer shutdown. So some of that will be pushed into the first quarter. So I’m expecting that we could be well, well over, well north of 3. And we’ll have inflation coming down.

As you said, productivity is very high. And we have measured inflation and observed inflation. And with the observed inflation, I think we can see that price is already down and that will trickle into the CPI and the PC, which the Fed looks at.

Maria Bartiromo: Well, it’s a good point because there is still a perception that prices are still high.

Inflation and Affordability

Scott Bessent: Well, prices are high. The Biden administration was a wipeout for working Americans, that the price level increased by 21, 22, 23%. But our friend Jason Trinidad, strategist, has something called the common man index. And that is what do working Americans buy? So basket of groceries, insurance, rent, car payments. And that was up in the mid-30s.

So very difficult other than with energy. The President, through Drill Baby Drill, has gotten gasoline prices down. We’re below $2 in many states. National average is below 3 even if you throw in the outlier of California. And so that we can get down. And we are working every day to get things down.

And affordability is two pieces. Affordability is price level, but it’s real incomes. Real incomes have gone up every month since President Trump took office. And as I said, I think we’re going to see a big year for real incomes this year.

Maria Bartiromo: Wow. And you said in terms of the tax refunds, are we talking about thousands of dollars that people will be getting as a result?

Scott Bessent: We could see for working families, for each wage earner, we could see up to $1,000 per wage earner.

Housing and Financial Policy

Maria Bartiromo: You said that prices are still coming down, but they’re still elevated. The president announced many things, a litany of things just in the last 100 days. And I want you to walk through some of these things and tell us why they’re important.

Because he put a ban on large institutional investors purchasing single family homes. He asked for $200 billion purchases of mortgage backed securities. And he put on a proposal for a 10% cap on credit card interest rates. We know credit card interest rates are always soaring up 28, 30% in some cases. That’s going to cut into earnings of the bank, certainly. And he also teased something about 401s that you would be able to tap into your 401 to then buy a home. Walk us through these things. Why are these so key in your view to growth and to reining in prices?

Scott Bessent: Well, here, why don’t we start from the beginning.

Maria Bartiromo: The first thing was the ban on large institutional investors purchasing single family homes and the purchase of mortgage backed securities.

Scott Bessent: Yep. So the ban on institutional investors in single family homes, for those of you who are not American in the U.S. Pre great financial crisis, we didn’t, institutional investors did not participate in the single family market. So post the financial crisis, institutional investors hoovered up single family homes. They continue to do it.

And there’s an unfair tax arbitrage there. You and I have a mortgage. We can deduct the mortgage amount. Institutional investors can deduct the borrowing amount, but they can also expense any repairs and depreciation. So we think that it is a good idea to have them out of the market.

We are going to give guidance at some point to see what is a mom and pop that someone, maybe your parents for their retirement, about 5, 10, 12 homes. So we don’t want to push the mom and pops out. We just want to push everyone else out.

And what’s important here you will hear some misinformation that says, well, institutional investors are 1, 2, 3%. That is true having been in markets for 35 or 40 years. Markets are made on the margin and institutional investors are much higher in boomtown markets like Charlotte, like Atlanta, like Huntsville, Alabama.

So they’ve done that. In terms of having Fannie and Freddie buy MBS, the mortgages are two parts. It is the 10 year bond yield and it is the spread between mortgages and the 10 year yield. So the purpose of that is to narrow the spread.

Maria Bartiromo: Okay. The cap on credit card rates is expected to cut into bank earnings between 5 and 18%. Your reaction?

Banking Regulation and Lending

Scott Bessent: We’ve done a lot this year. Bank stocks are at a new high. That through my position on FSOC, the Financial Stability Oversight Council and the three bank regulators, the Federal Reserve, the OCC, the FDIC, we have done a lot to deregulate banks. Their earnings are way up.

More importantly, it has increased their lending capacity. Oliver Wyman’s numbers, not mine, estimates that there’s $2.5 trillion of extra lending capacity.

The other thing that has been a focus of this administration and a focus of mine is small and community banks. Because what happened after the great financial crisis, all the regulations from Dodd Frank, we had too big to fail. But then with small banks you were too small to succeed. This regulatory morass, we have lost more than 50%, 50% of the small and community banks. And they power small business lending, real estate lending and ag lending. So we are trying to bring that back.

Maria Bartiromo: Yeah, it’s a great point because farmers really need the lending of these small community banks. Look Secretary, I want to get your take overall on your thoughts on what you’ve done so far.

Because the President back, back last year, right after the inauguration, I sat down with the President and I asked him what he wants the economy to look like in four years when he’s done and he was very clear, he said he wants private enterprise to rule the day.

One year later, you’ve taken a 10% stake in Intel, you’ve taken a stake in MP. Now I know that these are national security issues. And the other day the President told the defense contractors don’t pay dividends, don’t buy back any of your stock. You need to be fulfilling what the country needs in terms of producing a weapon.

So what do you want to say to people who say look here is a so-called capitalist president and Treasury Secretary and yet it’s not private enterprise running things. The President is telling the defense contractors what to do. And you’ve taken stakes in these companies.

National Security and Supply Chains

Scott Bessent: A couple of things, Maria. I think the only good thing that came from COVID was it was a test run for what would happen if our supply chains were ever broken due to a kinetic war. So we saw that there are five, six, seven key industries that we have to reshore.

So everything you just said, rare earth magnets, we’ve got to get out from under China’s grasp, the semiconductors. I would say that the single biggest threat to the world economy, the single biggest point of single failure is that 97% of the high end chips are made in Taiwan. If that island were blockaded, that capacity were destroyed, it would be an economic apocalypse. So we are reshoring the semiconductor industry to the U.S.

With the defense contractors, the defense contractors are no different than the systemically important banks. They exist like the systemically important banks exist because of the backstop from the Fed, because of the regulations. And these defense contractors have let down the American people. They have let down the American people. They are five, six, seven years behind on fulfillment of their contracts and they exist because of the U.S. Department of War.

So I do not think it is unreasonable to tell them that until further notice you need to build more factories and buy back less stock. And by the way Maria, these CEOs making 30, $50 million a year for failing the American people. So I don’t see any discrepancy there.

And as you said, everything on your list, everything on your list is national defense. And so once they get to some normalized level of backlog, I don’t know whether it’s two years, three years, then we can talk about removing those restrictions.

Maria Bartiromo: So what you’re saying is you want private enterprise to lead the day, but when it comes to national security, the government will be a shareholder.

Scott Bessent: And again, a lot of this isn’t private. You know, we have seen what happens when the free markets get kind of perverted because what happens with critical minerals that several companies have tried to stand up critical minerals facilities in the U.S. and the Chinese come lower price, undercut them and then they’re bankrupt.

So we have to, we are going to put in a system, price floor, price ceilings and when you talk about multilateralism and the U.S. leading, I just hosted at treasury last Monday that G7, so G7 plus Australia plus India plus Mexico plus South Korea and we are working at warp speed to create a critical minerals block where we can mine, process and refine critical minerals and China won’t have this sword over our heads.

Energy and Mineral Independence

Maria Bartiromo: So how long do you think it will be until the United States is in fact independent in terms of the refinement of these minerals, independent in terms of oil, etc. I mean I know that the U.S. could be the, is the largest producer anyway, but do you expect this year, next year? What’s your timetable in terms of the U.S. not relying on China for these things?

Scott Bessent: Well, obviously for energy, we are independent. We’re an energy superpower. And I would say 18 to 24 months. I went down about two months ago to my home state of South Carolina. And in South Carolina, for the first time in 25 years, there’s a producer there who made rare earth magnets. So they are starting to come off the supply chain. They believe that within two years, they can fulfill most of the rare earth magnet needs for the U.S. and then we also want to help our allies because the supply chain is important.

Sanctions and Economic Statecraft

Maria Bartiromo: What do you want to say about sanctions? Something else you’ve been working on, of course. What are you planning there in terms of Iran and the impact there? Do sanctions actually work? And the same question with regard to 500% secondary sanctions or tariffs on countries who purchase energy products from Russia.

Scott Bessent: Okay, so two things there. There are treasury sanctions, and if you look at a speech that I gave at the Economic Club of New York last March, I said that I believe the Iranian currency was on the verge of collapse, that if I were an Iranian citizen, I would take my money out.

President Trump ordered Treasury and our OFAC division, Office of Foreign Asset Control, to put maximum pressure on Iran. And it’s worked because in December, their economy collapsed. We saw a major bank go under. The central bank has started to print money. There is a dollar shortage. They are not able to get imports. And this is why the people took to the street. So this is economic statecraft, no shots fired. And things are moving in a very positive way here.

On the 500% tariffs on the buyers of Russian oil, that is a proposal that Senator Graham has in front of the Senate, and we will see whether that passes. We don’t believe that President Trump needs that authority, that he can do it under IEEPA, but the Senate wants to give him that authority.

And just to be clear that we have Europe buying Russian oil, still, four years later, they are financing the war against themselves. India started buying Russian oil after the conflict began, but President Trump put a 25% tariff on them, and India has geared down and has stopped buying Russian oil.

And then three, China is a very large buyer of Russian oil as they are of Iranian oil, as they were a Venezuelan oil. But guess what, Maria, no more Venezuelan oil for them.

Maria Bartiromo: So would you treat China the same as the others in terms of buying Russian oil with regard to tariffs and sanctions?

AI, Jobs, and the Future of Work

Scott Bessent: Well, we’ll see what happens with this Senate bill and with the Iranian oil, that’ll be up to President Trump.

Maria Bartiromo: Secretary, what do you want to say about artificial intelligence and the idea that AI efficiencies will likely kill jobs? A lot of people are worried about jobs. Do we have a plan in the US Government right now in terms of job creation in the face of AI efficiency killing jobs?

Scott Bessent: Well, Maria, we are seeing the record factory groundbreaking. That’s why President Trump wants to bring back these precision jobs to the U.S.

And historically, every productivity boom has led to job growth. Now, will there be some toing and froing in terms of people changing professions? I can’t remember what the number is. Maybe you know it, 50, 60% of the professions today didn’t exist 30 years ago.

Maria Bartiromo: Well, it’s a big number.

Scott Bessent: Technology, it’s a big number. But it’s something we’re very cognizant of. We haven’t seen it in the numbers yet. I think that it could be very different than what we saw with the China shock. The China shock was a blue collar phenomenon. My guess is the AI shock might be a white collar phenomenon. We’ll see.

Market Performance and Economic Broadening

Maria Bartiromo: Secretary, as we wrap up here, a moment ago you said, look, you’ve been dealing with markets for a long time, your entire career. What do you think of markets today? I mean, the market has been rallying on the president’s policy. Today, of course we’re seeing a sell off. But do you think the markets are getting it right in terms of rallying on the president’s policies?

Scott Bessent: Going into this Davos meeting, I try not to, to the extent I had success in the markets, it was not making short term predictions. But I can tell you what has been very heartening for me. I don’t have time to follow the markets as closely, but to the extent last year, year before, everyone said, “Oh, this is just mag 7 stocks. It’s not healthy.”

We’ve seen a big broadening out in the market. The Russell Index of smaller cap stocks has outperformed. The S&P equal weight has outperformed. And I actually think that that speaks to the economic recovery. We’re seeing it across all sectors.

Our friend Ed Hyman at ISI does these corporate surveys. Corporate surveys are the highest that they’ve been since June 2022. And I think you’re starting to see it in all sectors of the market. And the market follows the economy.

And again, I just think that we have the best place in the world. Come build your factory. You have tax certainty, you have regulatory certainty and you have energy certainty and, of course, deregulation.

Innovation and the Regulatory Divide

Maria Bartiromo: And that was one point that I wanted to make before we wrap up here, that Mario Draghi wrote a report two years ago about regulation in Europe and the fact that the largest market cap company in Europe is Novo Nordisk because of Ozempic, about $400 billion or so. And we just saw Nvidia in the United States had $5 trillion.

Scott Bessent: Well, clearly, Maria, the innovation, the change and the ability to adapt is in the US. The US is the innovation capital of the world. I don’t think anything’s going to change that.

I was just asked in another meeting by some business leaders, “What advice would you give to Europe?” And I said I would operationalize the Draghi report because the EU was supposed to cut down on red tape, but it has logarithmically increased it.

When I talk to tech executives, they will tell me it is easier doing business in China than the EU.

Maria Bartiromo: Wow.

Scott Bessent: That’s not a great stat. I had a European businessman come to see me the other day and he said, “Secretary Bessent, it took me three days to get an appointment with the White House and with you. It took me 90 days to get an appointment with Ursula von der Leyen. And we are one of the largest employers in Europe.”

So there’s just a different mindset here. And I think the mindset has got to change. It’s got to change to a growth mentality. And that’s President Trump’s invitation: we are growing, we’re deregulating. And come and join us.

The G20 and Global Growth Strategy

The US is going to host the G20 meeting next year. And on the finance track, we have identified the greatest financial risk as a lack of growth, because post-Covid, every government balance sheet has ballooned and we have this gigantic government debt.

There are two ways. You can either cut your way out of it through austerity, no voter wants that, or you can grow your way out of it. So we are inviting the world, come, grow with us, prosper with us, and we can all do it together.

Maria Bartiromo: Secretary, thank you very much. Thank you.

Scott Bessent: Thanks, Maria.

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