Bessent says Trump's tariff, tax-cut, deregulation agendas will drive investment to US

By David Lawder

WASHINGTON (Reuters) -U.S. Treasury Secretary Scott Bessent on Monday said President Donald Trump's tariff, tax-cut and deregulation agenda would work together to drive long-term investment to the U.S. economy, adding that U.S. financial markets were "anti-fragile" and would weather any short-term turbulence.

Bessent, in prepared remarks to the Milken Institute Global Conference in Los Angeles, delivered a full-throated defense of Trump's tariffs but emphasized the Republican tax bill working its way through Congress, saying it would make many parts of the president's first-term tax cuts permanent, including a deduction for small businesses.

"The primary components of the Trump economic agenda - trade, tax cuts, and deregulation - are not standalone policies. They are interlocking parts of an engine designed to drive long-term investment in the American economy," Bessent said.

Bessent said that Trump's tariff blitz since taking office for a second time on January 20 was engineered to encourage companies like those attending the conference to invest in the U.S., build factories and make products in the U.S.

This effort will be rewarded with tax and deregulation benefits. Bessent said Trump's tax legislation would provide tax credits and deductions for research and innovation into high-tech operations, restore 100% expensing for equipment while expanding this benefit to new factory construction to accelerate investment.

"The result of the president's economic plan will be more. More jobs, more homes, more growth, more factories, more critical manufacturing plants, more semiconductors, more energy, more opportunity, more defense, more economic security, more innovation," Bessent said.

But the Treasury chief said U.S. financial markets were well equipped to weather any short-term turbulence, citing their rebound from challenges over the past century, including the Great Depression, two World Wars, the September 11, 2001, attacks, the 2008-2009 global financial crisis, the COVID-19 pandemic and the subsequent surge in inflation.

"Each time the American economy gets knocked down, it gets back up again. And it gets back up even stronger than it was before, Bessent said. "U.S. markets are anti-fragile. Indeed, the entirety of our economic history can be distilled in just five words: 'Up and to the right.'"

(Reporting by David Lawder; Editing by Chizu Nomiyama and Paul Simao)