The traditional assembly of former financial secretaries to greet a newly shaped in the fold is usually a carefree and pleasant matter. When the group had called on President Trump on the “Liberation Day” this month, the tone was remarkably serious.
The dinner organized by former finance minister Steven T. Mnuchin took place in a moment of tumult for the US economy. The president had built the global trade with punishment for tariffs for allies and opponents, and the finance minister Scott Bessent was in the center and defended a policy that many considered to be economic misconduct.
“The mood was dark,” said 99 -year -old W. Michael Blumenthal, who led the finance department in the Carter administration and was present.
According to Blumenthal and other people who were familiar with dinner, Mr. Bessent was pushed behind the tariffs and the effects on the economy. Sometimes Mr. Bessent increased his voice when his predecessors confronted him with Mr. Trump's approach.
“He not only smiled,” recalled Mr. Blumenthal. “There he is – he has to defend it.”
The guest list included Robert E. Rubin, Henry M. Paulson, Lawrence H. Summers, Timothy F. Geithner and Jack Lew. Former finance minister Janet L. Yellen was traveling in Australia and did not take part, a spokesman said.
The finance department refused to comment on dinner, and Mr. Bessent refused to comment on this article.
The bumpy greeting was reflected in the first months of Mr. Bessent in the most difficult work in Washington. Wall Street welcomed its nomination in the hope that he would be a voice of moderation that Mr. Trump's instincts could alleviate for praise scattershot tariffs around the world.
Now the 62 -year -old Mr. Bessent is the focus of an ugly trade war with China, of which the economists fear that inflation is re -fitting and causing global recession. In most metrics, the US economy was the strongest in the world when Mr. Trump took office in January and some analysts prompted to describe the President's actions as historical self-inflicted wound that achieved a goal against his own team for the football player.
“It is one of the greatest own goals in diplomacy, economy and trade, which I think you've ever done,” said David author, a fellow economist.
Before he came to the administration, Mr. Bessent had expressed his own doubts about the tariffs. But Mr. Trump's protectionist trade instincts are notoriously difficult to correct.
As a former hedge fund manager who founded the Key Square Group, Mr. Bessent only wrote in a letter to the investor last year that he was skeptical about tariffs: “The tariffs are inflationary and would hardly strengthen the dollar -hardly a good starting point for a American industrial renaissance.”
But as finance minister, Mr. Bessent had to remain publicly near the government of the government. He now argues that tariffs will not be inflationary, but instead a one -time “price adjustment” of the economy will cause.
Some of his comments raised the eyebrows. After China had reacted to Mr. Trump's tariffs by impending American products higher taxes, Mr. Bessent played the potential effects on the US economy and said: “Well, what?” In his view, the United States hold the upper hand because China is dependent on exports to America.
Two days later, Beijing returned with even stiffer taxes and escalated the economic struggle between the largest economies in the world and sent Jitter through the financial markets.
Since the markets had suffered their worst stand for years, Mr. Bessent suggested that people who were in retirement in retirement probably did not pay much attention to the falling value of their nesteier.
“Americans who want to retire, Americans who have put them away in their savings accounts for years, I think they don't look at the daily fluctuations of the event,” he said last Sunday in NBCS “Meet the Press”.
The Democratic National Committee confiscated Mr. Bessent's comment that the economy was in “pretty good condition”, and found that the Tank stock exchange.
Mr. Bessent was pushed into a somewhat uncomfortable position because the administration's trade agenda was more aggressive than most experts expected.
Mr. Trump has imposed customs duties, including at least 145 percent taxes on Chinese imports. The movements sent the shares that arrived, strained the bond market and prompted the economists to increase their recessions.
Some top republican legislators, including Senator Ted Cruz from Texas, have also come out of the tariffs. Mr. Cruz warned of the last episode of his podcast that tariffs are taxes on consumers.
“It's terrible for America,” he said. “It would destroy jobs here at home and add real damage to the US economy if we had tariffs everywhere.”
Mr. Bessent managed to moderate Mr. Trump's approach to a certain extent. During a trip to Mar-A-Lago last Sunday to inform the president about volatility, Mr. Bessen persuaded him to pause so-called mutual tariffs for dozens of countries and to start trading talks with these nations. After his return, Mr. Bessent said, who claimed that he was largely geared towards tax policy that he took on a leading role in trade talks.
On Friday evening, the administration released a rule that seemed to free smartphones, computers, semiconductors and other electronics from most punitive tariffs of the President of China and gave a reparation such as Apple and Dell.
However, the in -depth confrontation with China indicates that there will be more volatility, since Mr. Bessenen debates with Peter Navarro, Mr. Trump's trade advisor, and Howard Lutnick, the trading secretary who advised a Hawkischer approach.
“The best thing is that he can be there as a consultant,” said Marlene Jupiter, who worked with Mr. Bessent for five years when he headed better capital. She said his deep knowledge of markets should help to calm investors who were nervous about trade uncertainty, but “I don't know how much Trump listens or does not listen.”
The inability of the finance minister to contain Mr. Trump more effectively has dismayed some investors.
“In the sense that I am disappointed by better, Mnuchin and Cohn never let it get that far,” said Spencer T. Hakimian, the founder of Tolou Capital Management, a New York hedge fund. Mr. Mnuchin as finance minister and Gary Cohn as director of the National Economic Council were two business advisors in the first term of office of Mr. Trump, who warned him of the overturning of the tariffs.
“The whole reason why the markets were interested in improving,” added Hakimian, “is that she as Mnuchin 2.0 – a traditional Wall Street man who would not allow it to have seen it as Mnuchin 2.0.”
Mark Sobel, who worked in the finance department for almost four decades, noticed that Mr. Bessent was attributed to scaling the mutual tariffs, but was raised questions about how he publicly justified it.
“It will be difficult for the Americans to see him as a credible and serious business spokesman who were comments like the tariffs and downs, or citizens should not be annoyed by the daily stock market fluctuations when their 401 (K) s refuel,” said Sobel.
Ultimately, however, the final decisions about tariffs will lie with Mr. Trump.
“While the Finance Minister of SeniorMost is the administration, the President is the captain of any team,” said R. Glenn Hubbard, former deputy deputy secretary of the finance department. “Whatever the finance minister says must be on the same side as the president.”
During dinner with Mr. Bessent, the former secretary encouragement, consultants and historical perspective on their concerns about Mr. Trump's guidelines offered the persons familiar with the matter.
In an exchange, Mr. Summers, who served in the Clinton government, told great stories about George Shultz, who was nominated in 1972 as President Richard M. Nixon's finance minister and survived his boss about the determination of the universities and used the Internal Revenue Service to examine political enemies.
In a recently published social media post, Mr. Summers said that if he had still been to the government, he would have resigned through the analysis that the Trump government would have created to support her tariff plan.
Mr. Blumenthal said that he wished Mr. Bessent happily in a job that is more complicated when “the best for the country is what the president wants”.
He added that traditionally the inviting meals were slightly on political discussions or advice from the Veterans of the Ministry of Finance.
“This time was a very special occasion,” said Blumenthal.
Ana Swanson has contributed to the reporting.