Secretary Bessent on Fox News’ Special Report with Bret Baier

Some of the talk here in Washington about tomorrow's meeting between Presidents Trump and Xi. He has landed here in D.C. Let's get a preview from Treasury Secretary Scott Besant. Mr. Secretary, thanks for being here. Brett, good to be with you. The President Xi just landed, his first visit in more than a decade. The President was on the tarmac. You met with a top negotiator for China again today. It was not scheduled. What came out of that? So Brett, we had a very extended meeting on Sunday in New York. This is their trade. This is the fellow who leads our economic and trade team, Vice Premier Hu Yifeng. We met for about 12 hours on Sunday and we still had some unfinished business. We met today to see if we could do a bigger deal as opposed to just a series of smaller things. We have agreed today that we will extend what we call the Busan Agreement, the detente economic between the two countries, that was scheduled to end on November 10th. That is going to be extended until January 10th to give us more time to see what we can do on the economic front. We had a very productive Sunday. We had a very productive meeting this morning. So it's going to be two, how long? Two more months. Now, purportedly, the Chinese wanted two years. You want two months. You think that a bigger deal can be made in that time? I don't know whether a bigger deal can be done. I don't know whether we will just roll the current deal. There's some deliverables that have not been perfect on the Chinese side. So we also want to see, now that we've sat down and told them our expectations, to see if over the coming months they can be a bit more fulsome in enacting the agreement. For this meeting, what could the president potentially walk away tangibly with? So, good thing, Brett, is this is their second in-person meeting. There's a chance they may have a historic four meetings this year. Four meetings between the most powerful country in the world and the second largest economy in the world. Visit in Beijing, this visit, a visit to Shenzhen for a conference in November, and then President Xi coming for the G20 in Doral. Many of the things that were begun in Beijing, whether we see whether there are $30 billion on each side, non-critical goods that we can take the tariffs off of. That's the board of... That's the board of trade. We call it 30 by 30. We're going to see probably some announcements of maybe financial services, ag purchases. So there's quite a bit going on here. And for the ag purchases, we've heard those before. Farmers have heard them. Could they maybe come from the political aspect before November? Well, what we want to ensure is that they are meeting their obligations. Chinese have been very good thus far about meeting their obligations this year. They've agreed to buy $25 million, excuse me, 25 million tons of soybeans. And they've been very fulsome in those. They have about $17 billion of other ag commitments that we think they're a little behind schedule on and we are encouraging them to pick those up. Yeah. I talked to the president in Beijing about the price of gas and how he looked at it. And this is when he was in Beijing. Here's what he said. Gas prices in America are still high, painfully high. They're going to drop like a rock as soon as it's over. Painfully high though now and could be creeping higher before it's done. Excuse me. Lower than Biden, straight will be open and you will see gasoline prices drop, energy prices generally. I call it a little pain. Look, I agree. The oil goes up, but it's going to come down lower than it was. All right. So tonight, crude oil prices are at roughly $92, ticking up a little bit. National average for gas prices. We did pull this stat, just a comparison on days where crude oil was above $100 a barrel for President Obama, 308, first term of President Trump, zero. President Biden, 83 and 24 of days above $100 a barrel. Where do you see this and how much does it affect our economy as you look at inflation overall? Brett, there are two kinds of inflation. There's headline inflation and core inflation. And what we've seen is that we do have a supply shock here with the Iran conflict. We're going to get to the other side of this. On the other side, what we've seen is this has not moved through to core inflation. Core inflation has actually moved down towards a 2.4, lowest in five years, lowest in five years. So that tells me once we are on the other side of this energy supply shock and as the President said in the video, that I actually believe, along with him, that oil prices will be much lower because we've seen a tremendous amount of supply come on in the, just in this year. For the family in Ohio, for the family in Michigan, they're feeling something much different. What do you tell them about the state of the economy? Well, the economy is very strong. And what I would say is we saw the PMI numbers today, the strongest, the purchasing managers agreement index, strongest since 2021. We've seen over a million private sector jobs created. We are seeing real wage growth. So what I would say is that unlike under the Biden administration, where we had negative wage growth, we are seeing substantial wage growth here. That wage growth is going to continue going. We will get to the other side of this Iran conflict. The energy prices will drop and you will pick your purchasing power back up. Without the Iran war, people would be feeling a lot different, you think? Well, I think that the inflation number, I know the inflation numbers would be very different. I think we would have been back at the Fed's target now. But on the other side, that if the Iranians were to get a nuclear weapon, I would say gas could be six, eight dollars a barrel. I want to talk about the Iran pinch and your economic pressure. But back to China for a minute. You've opened this new channel with China on artificial intelligence. The president calls it super intelligence, a kind of hotline if something goes wrong. So far, we haven't heard publicly that Beijing has agreed to that. Did your meeting suggest that they would? I believe they will. They're very eager to engage with us on A.I. because we have the U.S. is substantially in the lead. I don't think China is behind us, but they are well ahead of any other country. And I think it's very important for us to engage on this. I think we are working to define with them what we think the most important or the most perilous risk factors are, whether it's uncontrolled agents, whether it is non-state actors using A.I. either for cyber ops or for biologics. And would it be emergencies, this hotline, or it's kind of yet to be determined? It's yet to be determined. But I would also hope that we would be able to talk about any incidents that have occurred, especially any that have crossed national borders. There's some reporting this week that you're a leading candidate to be the president's new A.I. Has the president asked you? I would think that that is probably fake news. I will continue being part of the administration's A.I. effort. Would you want it? I think there's one A.I. and that's President Trump. You've said humans are responsible, not A.I. Was that a signal that this liability question about companies is more about it's the humans? It's 100 percent. Humans are creating these A.I.s and the agents and the responsibility lies with them. I would tell your viewers to read Daniel Huttenlocher, who has one of the A.I. institutes at MIT, had an excellent New York Times editorial last week where he goes into this. So I am in complete agreement with Professor Huttenlocher. A month ago, you launched what you called Economic D-Day on Iran. Today, oil is still, as we talked about, about 100. The strait is definitely pinched. There are tankers that are getting through, but a lot of them are getting attacked regularly. A month in, is it working? Well, first of all, Brett, the tankers, they may get hit. Many of them just sail on. They just sail on. Iranians may launch three, four, five, six drones after them. Our great navy is blocking them. But we are getting between 10, 15, sometimes 17 million barrels a day out. To put that in perspective, before the conflict began, the number was 20. And there's probably another 3 million going out through alternate methods. So that gets us back to somewhere between 13 and 20, which is the reason we have seen oil come down from the spring highs. And in terms of Operation Economic Outcast, we are squeezing the Iranians like they've never seen. Today, I would say that the external flights from Iran, probably more than 80 or 90% of them got shut down. I'm not sure how the Iranian representatives at the UN are going to get home. So we have made it very clear around the world, whether it's the financiers, the people who are doing business, the people who are supplying the Iranians, we know who you are, you know who you are. And we are going to prosecute and execute your companies and your bank accounts every day and every week. One of them is here. I mean, China is still Iran's biggest oil customer. President Xi is here. You haven't yet sanctioned the big Chinese banks. Are they off the table now because you're dealing with Beijing? We have had very good discussions with the Chinese. But with some countries, it's better to have private discussions rather than to have public spectacles. We've made public spectacles. Our partners in the UAE have been very good. They helped us close the branches of the second largest Egyptian bank that have funneled 1.8 billion. We closed with our Turkish partners the 30th largest bank in Turkey that was getting billions to the regime. And the second largest bank in Russia, we sanctioned their external. I mean, that sounds really impressive. Why does why is Iran this resilient that they're a cornered animal? And yet we they we the world has never seen anything like this. It's and it's because of sequencing. So we had six weeks of kinetic activity. We have the blockade. And now we have an effort never seen before in terms of constricting and cutting off the financial oxygen to them. And I don't know whether it's going to be a week, a month or two months, but they are going to yell uncle. And the goal here can be one one one of three states of the world. One, the regime turns on each other. Not impossible to we get some kind of uprising for the Iranian people. They probably killed 50000 of their own population. So very, very difficult. And then three to get the Iranians to if they want to make a deal to stick to the deal, as President Trump said at the beginning of August, he didn't think the Iranians were ready for a deal. We gave the MOU a try on June 3rd. And then the Iranians, a few weeks later, began firing the on ships in the strait and being very aggressive. And this time, if there is a deal, I guarantee you they're going to stick with it. They made news about the deal at the beginning, the two month extension with China on that trade before you leave. Give me one number you want voters to look out before they vote in November and why I would actually say two. So it would be the wage levels going up. Medium wages are up three point five to three point seven percent. And the a million a million jobs, one point three million jobs for Americans that we have seen. And we are seeing the manufacturing renaissance in this country. And I think we are just starting to accelerate away now, Brett. Well, we'll watch all of this and the summit over the next day. Mr. Secretary, thanks for the time. Good to see you. Thank you.