Treasury Sec. Bessent says countries who don’t negotiate could see tariffs rise: Full interview

Welcome back. There are new economic warnings after the credit ratings agency Moody's downgraded the United States credit rating one notch from its triple A rating. Moody's citing concerns over the nation's rising debt. It comes as President Trump's tax bill suffered a setback in Congress this past week. Joining me now is Treasury Secretary Scott Besant. Secretary Besant, welcome back to Meet the Press. Kristin, good to see you. Thanks for having me on. It's wonderful to have you on after a long foreign trip. Thank you for being here let's start right there with Moody's downgrading the nation's credit rating and they do cite the debt. I want to read you a little bit of what Moody's says. It says, quote, if the 2017 Tax Cuts and Jobs Act is extended, which is our base case, it will add around four trillion dollars to the deficit over the next decade. Several Republicans, Mr. Secretary, are citing similar concerns. Does the President's tax bill need to do more to address the nation's debt and deficit? Well, Kristin, first of all, I think that Moody's is a lagging indicator. I think that's what everyone thinks of credit agencies. Larry Summers and I don't agree on everything, but he said that when they downgraded the U.S. in 2011. So it's it's a lagging indicator and just like Sean Duffy said with our air traffic control system, we didn't get here in the in the past hundred days. It's the Biden administration and the spending that we have seen over the past four years. We inherited 6.7% deficit to GDP, the highest when we weren't in a recession, not in a war, and we are determined to bring the spending down and grow the economy. Fair enough. But under President Trump's first administration, he had an $8 trillion to the nation's debt in his first term. So there's plenty of blame to go around. But let's review. We were in the rescue portion of covid. The by the Biden administration was in the recovery portion and Kristen, it would have been if not for Senator Manchin and cinema who were no longer the in the Democratic caucus, that it would have been four or five trillion more. It did include the tax cuts as well. But let me ask you about Walmart. This big news from Walmart. It says it will start raising prices on its consumers, Mr Secretary, as early as this month due to the tariffs. Now, President Trump out with a very stern warning on social media, saying Walmart quote should eat the tariffs, adding the company made far more than expected last year. Is the president asking American companies to be less profitable? I was on the phone with Doug McMillan, the CEO of Walmart yesterday, and Walmart is in fact they are going to be, as you describe it, eat some of the tariffs, uh, that just as they did in 18 19 and 20. Uh, the other thing, though, that we are saying that Doug passed along to me that with their consumer, the single most important thing is the gasoline price and gasoline prices have collapsed under President Trump. So we are seeing that the other thing that will happen that is a direct tax cut for consumers. Then the transportation costs are also a big input. So let's see what happens. What you're describing was Walmart's earnings call. The other thing that companies have to do, they have to give the worst case scenario so that they're not sued. So, you know, I think overall we're seeing a decline in services, inflation and I we saw inflation come down for the first time in four years. Well, you know, in my conversation with former Vice President Mike Pence, he says he sees tariff as a tax. How far, Mr Secretary, is the president? Is the administration willing to go to prevent CEOs from increasing prices? Well, I I think we are hearing here is the tax. People are saying tax increases are inflationary that when I was testifying before Congress last week, the one of the congressman said that and I said, Well, congressman, if taxes are inflationary, let's cut taxes. So let's get this tax bill done. Bring down taxes, which according to this line of thinking should be disinflationary. But the Federal Reserve has said that tariffs are inflationary. Just to be very clear, you said you called Walmart. Is that what CEOs can expect that you that the president, that other members of the administration will apply pressure to try to prevent them from passing on these prices to CEOs? I didn't apply any pressure. The the Doug and I have a very good relationship, so I just wanted to hear it from him rather than second third hand from the press. And again, as I said, this is all from their earnings call. And on an earnings call, you have to give the worst case scenario. Kristen to go back to what you said. The Federal Reserve is not saying that tariffs will cause inflation. They're saying they're not sure and that they're in wait and see mode. Let's talk about the other big news that you were a part of a week ago in Switzerland, negotiating with Chinese officials. You and the administration lowered tariffs from the high rate of 145% to 30% for 90 days to allow talks to continue. But President Trump had said previously, and I'm quoting from him, China needs to make a deal with the U. S. We don't have to make a deal with them. So why did the United States back down? Uh, neither side back down. Both sides realized that this, as I had said, the was unsustainable. So we had the equivalent of an embargo there, which is not what either side wanted. It was this constant tit for tat escalation. So both sides brought the tariffs down by 115%. So for 2025, we have increased tariffs on China by 30%. They have increased them by 10 on us. We now have a mechanism in place to continue talks. Okay. On Friday is a piece of this. President Trump, while he was on the foreign trip, said that countries should expect letters from you from Secretary Letnik saying this is what the tariff rate is going to be. Mr Secretary, does that effectively mean that these negotiations with other countries are over and how high should they expect tariffs to go above 10%? This means that they're not negotiating in good faith. They're going to get a letter. The saying here is the rate. So I would expect that everyone would come and negotiate in good faith. You expect that rate, though, that you would slap on any country that you think is not negotiating in good faith to be above 10%? Well, I think that it would be the April 2nd level. Some countries were at 10%. Some were substantially higher, and the negotiating leverage that President Trump is talking about here is if you don't want to negotiate, then it will spring back to the April 2nd level. I have to ask you about the war in Ukraine. President Trump saying he is going to speak with President Zelensky and Putin on Monday. Former Vice President Pence told me it is time to impose harsh sanctions. Now, what say you, Mr Secretary? Is it time to impose sanctions against Russia? Well, I think we will see what happens when both sides get to the table. President Trump has made it very clear that if President Putin does not negotiate in good faith that the United States will not hesitate to up the Russia's sanctions along with our European partners. What I can tell you is the sanctions were very ineffective during the Biden administration because they kept them low because they were afraid of pushing up domestic oil prices. Very quickly, how long for the timeline until you move to sanctions? Obviously, there's a call, but if the president doesn't feel like there's progress, how much time is he gonna give them? Look, I'm not gonna tie the president's hands in his negotiations. Let me ask you, former Vice President Mike Pence echoed several of President Trump's, quite frankly, own allies in expressing concerns about this plane that Qatar has offered to President Trump. They are saying it sends the wrong message. It sends the wrong message and raises concerns ethically, raises concerns constitutionally and about security. Why is it appropriate for the president to accept a $400 million jet from Qatar? Well, it's not the president accepted to be the United States government. And Senator Mullen said this weekend that the talks had actually begun under the Biden administration. So, Kristen, what I can tell you is I think this is a, uh, off ramp for many in the media not to acknowledge what an incredible trip this was. The President Trump has brought back trillions of investments in the United States. Every stop we made that the enthusiasm in Saudi Arabia, in Qatar, in the United Arab Emirates to invest in the United States that they want to push more and more. They have funds here. And if we go back to your initial question on the Moody's downgrade, who cares? Qatar doesn't. Saudi doesn't. UAE doesn't. They're all pushing money in. They want to. They've made 10 year. They've made 10 year investment plans. So this administration we're doing peace deals, trade deals and tax deals. And just very, very quickly, President Trump has said he plans to keep that plane in his presidential library after. But what do you say to some Republicans who argue it sends a message that the United States can be bought or that other countries can curry favor if they offer gifts? I say that the gifts are to the American people. There's trillions of dollars of investments that are going to create jobs in the U. S. Whether it's the U. A. E. Building this gigantic aluminum plant in Oklahoma, whether it's these data centers that Qatar is going to do is 600 billion on its way to a trillion from Saudi that it all accrues to the American people. All right, Secretary best. And I know you've had a long week traveling with the president. Thank you so much for being here. We really appreciate it. Good to see you. Thanks for watching. Stay updated about breaking news and top stories on the NBC News app or follow us on social media.