Tag: Scott Bessent

  • In Georgetown, the scariest part of Halloween is the virtue-signaling

    In Georgetown, the scariest part of Halloween is the virtue-signaling

    Halloween has never been my favorite holiday, but as I was warned when we moved here last November, in Georgetown it is a serious affair. For the entire month of October, giant spiders scale the rowhouses, ghosts and cadavers dangle from trees, cackling animatronic witches guard the cemetery and the local bed and breakfast, parking spaces are “reserved” for ghostbusters and on every other block there’s a 12-foot-tall skeleton waiting to send my two-year-old into shrieks of delight.

    Then there are the pumpkins: every shape, size and color, stacked by the dozen in tasteful arrangements on every step of every stoop in town. How does everyone pull this off, I asked my real-estate agent, my one-stop source for all Georgetown-related trivia. There’s a pumpkin-delivery service, of course. For $1,300, you can “bring the full pumpkin patch experience right to your doorstep.” As one friend quipped when passing a particularly bountiful stoop, I’m pretty sure these pumpkins cost more than my monthly rent.

    Call me a Halloween convert: I confess I love it. I proudly spent more money than my husband needs to know on the pumpkins lining our driveway and the skeletons climbing our trellises. It’s a joy to see the season through my toddler’s wide eyes and to join in the silly traditions of our new neighborhood, where, it seems, everyone – not just the politicians – has a lot of skeletons in their closet. Indeed, as you walk the festive brick-paved sidewalks here, you could almost forget the political fights happening just across Rock Creek and the fact that half the neighborhood is currently furloughed. Almost.

    But a few stubborn neighbors won’t let you forget it. For them, it seems, Halloween isn’t about the children – it’s an opportunity to virtue-signal.

    “Elect a clown. Expect a circus.” Under blood-stained, striped banners in a front yard on a prominent corner, this sign sits amid a sea of clown-nosed skeletons, labeled the “White House of Horrors.” Each skeleton has been given a name and a costume. There’s Stephen Miller, dressed like a ghoul or Dementor. “Cosplay Kristi,” with a brown wig and camouflage vest (American flag upside down). Pete Hegseth, or “Secretary WhiskeyLeaks 👊🇺🇸🔥,” in an army jacket. Scott “Scottie” Bessent with a tee shirt expressing his love of tariffs. RFK Jr., “Secretary of Sick,” a monkey perched on his shoulder with a stethoscope.

    And, of course, skeletal Trump himself, with a blond wig and full clown regalia. “Carnival Barker-in-Chief. Don the Con. Tangerine Palpatine. Cadet Bone Spur. Commander-in-Cheese.” Gosh, so clever!

    A mere month after the biggest political assassination in decades, this Georgetown resident is living out a blood-soaked fever dream of dead political rivals. It’s crass, it’s incendiary, and it’s not particularly funny. Whatever it means to be in the Halloween spirit, this ain’t it.

    Nor is it neighborly. Scott Bessent and RFK Jr. both live practically within spitting distance of this house. They’re big boys, of course, and can handle some dark satire. They’ve seen worse: indeed, just weeks ago police responded to a bomb threat at Kennedy’s house. But what sort of message does it send to our children – who are, after all, the primary audience for these Halloween decorations – about how to coexist with those with whom you disagree?

    Remarkably, in a district with the highest percentage of Democrats in the nation (75.6 percent at last count), Georgetown is not a political monolith. On the contrary, it is the least politically predictable place I’ve ever lived. One minute, you’re commending a neighbor for lowering his flag to half-mast in honor of Charlie Kirk; the next you’re waving to Alejandro Mayorkas. At our avowedly apolitical local church, you can find yourself seated simultaneously behind a high-ranking member of the Trump administration and beside a woman carrying an Obama “Hope” tote bag. And in my (admittedly limited) experience, the people here who don’t work in politics – the butchers, the real-estate agents, even the consultants – are far less political than, say, your average New Yorker, presumably because to do good business in this town, you have to get along with everyone.

    So there’s a real opportunity here to have conversations across the aisle with the person living across the street from you. Conversations that could change minds and even change policy. As Henry Kissinger famously observed, “The hand that mixes the Georgetown martini is time and again the hand that guides the destiny of the western world.”

    But conversations are hard, and virtue-signals are easy. Ever since the Secretary moved in last spring, RFK Jr.’s immediate neighbor has staged a series of silent protests, devoting a prominent window display first to autism and then to DC statehood. Now, the house is decorated for Halloween, but a skeleton in the window holds a sign: “WISH I HAD TAKEN MY VACCINE!” And the house next to that one has followed suit, its front yard decorated with fake gravestones, one of which says, “I did my own research.”

    On the other side of the anti-vax skeleton, Kennedy’s neighbor has hung another sign in spooky letters: “WELCOME.” But who is welcome, exactly? Will Kennedy’s grandchildren be welcome if they ring the doorbell on Halloween? Will my daughter?

    The Gospel commands us to love thy neighbor – and not just the good neighbor who helps you with your recycling. Love the bad neighbor who blasts loud music into the night. And love the neighbor whose politics you abhor. This doesn’t mean you can’t criticize your neighbor: Jesus himself practiced tough love, and tough love requires criticism. But it does mean you should offer those criticisms respectfully and in good faith.

    Maybe that’s what it means to be in the Halloween spirit. This spooky season, ring a neighbor’s doorbell and have a conversation, even an argument. And welcome any neighbor who knocks at your own door, with a bowl of candy… and, for the grown-ups, a freshly mixed martini.

  • So much for Trump’s peace push

    So much for Trump’s peace push

    Here we go again. Now that Russian president Vladimir Putin has resumed his bombardment of Ukraine, President Donald Trump is responding by sanctioning the oil giants Rosneft and Lukoil. So much for the vaunted peace push that Trump has been engaging in since he met with Putin in August in Alaska. 

    The atmosphere has turned distinctly frostier since they held their pow-wow. Budapest was supposed to be a reprise of the brief thaw that took place in August but Trump has got cold feet after the Kremlin indicated that it was in no mood to compromise over the actual boundaries between it and Ukraine. Instead, as foreign minister Sergey Lavrov indicated, Russia cannot rest content as long as what he called unrepentant Nazis were in charge in Kyiv. Putin and his camarilla, in other words, want a restoration of the old order, which is to say a pliant puppet state.

    Apart from his blatant military failure to conquer Ukraine (it was supposed to be a cakewalk, according to what turned out to be his non-intelligence services), the problem for Putin is that Kyiv is becoming more, not less, independent as the war continues. Zelensky has learned from his previous encounters with Trump not to overreact to his momentary ebullitions of rage, which are usually replaced by a weary resignation to geopolitical dictates. Those dictates are that he is no position to dictate a surrender because Europe, much to its own surprise, has become the chief source of weaponry for Ukraine. Exhibit A is Zelensky’s new push for 150 Gripen fighter jets from Sweden, which he is currently visiting. For Europe, the supply of weaponry to Ukraine bids fair to become a source of a kind of Keynesian stimulus program. It also has the not inconsiderable advantage of allowing the Ukrainians to wage the conflict with Russia that the peace-loving Europeans themselves dread. 

    Trump’s own attention to Ukraine is episodic. He was briefly reanimated by the prospect of earning a Nobel Peace Prize. With Putin balking at a real cease-fire, Trump has other projects to pursue, most notably demolishing the East Wing of the White House and replacing it with a pharaonic temple to himself in the form of a ballroom that can hold up 900 or more guests. Trump may well sell the naming rights to the gleaming golden hall unless he decides to affix his own to it. 

    The real loser in all of this is probably Hungarian President Viktor Orbán, who faces a stiff election challenge in April. Hosting Trump and Putin would have been a true feather in his cap. Instead, he will have to forego the fancy visit and continue the grinding prospect of serving as Putin’s wingman in the European Union, a status that has brought much obloquy and little profit, other than a dispensation when it comes to energy prices from Russia. 

    Given Trump’s volatility, however, it may only take another phone call from Putin to prompt Trump to ponder another summit meeting. For now, Putin is flexing his own muscles, ordering a nuclear drill in northwestern Russia. As he becomes exasperated with Trump’s failure to propitiate him, Putin’s new credo when it comes to atomic weapons may be “drill, baby, drill.” Let’s hope it remains at just that. 

  • Can stablecoins make America the crypto capital of the world?

    Can stablecoins make America the crypto capital of the world?

    “I will make sure the US is the crypto capital of the world,” Donald Trump vowed earlier this year. In July, he signed the Guiding and Establishing National Innovation for US Stablecoins (Genius) Act. The Act creates federal guardrails for dollar-pegged stablecoins and regulates who can issue and redeem them. Concerns from law enforcement are also addressed, by making sure anti-money laundering and consumer regulation applies.

    But what are stablecoins? They are digital tokens built to stay at a stable price, usually one dollar. They sit on the blockchain – the computer protocol that makes crypto work – but what’s underpinning their value are real-world assets, usually cash or government bonds. So you get all the benefits of crypto’s instant, 24/7, deregulated and decentralized systems – but without the rollercoaster rises and losses, that made bitcoin famous. Stablecoins are supposed to be crypto without the chaos.

    Getting ahead of crypto’s latest innovation would be distinctly American. Washington has repeatedly reinvented money to suit its power. But who, exactly, is “minting” these coins? Should it be private firms, or do central banks have a role? One crypto trader-turned-influencer suggests governments “should cut out the existing private issuers of these tokens” and instead mint their own currencies in crypto form. “They would be able to offer guarantees for the underlying asset that private companies cannot,” he explains. If states lend legitimacy to blockchain technology then crypto values could skyrocket, too.

    Regardless of who issues them, the benefit of stablecoins, the trader explains, is that they allow “instant transfer and settlement between anyone, anywhere in the world.” So no delays, barriers or time lags when you want to move money. They also enable decentralized finance, or “DeFi,” whereby people can lend, borrow and swap assets without the need for a bank in the middle – all policed by ones and zeros. And it’s not just cash and bonds to which crypto coins might be pegged. Tokens can now “represent assets like gold, stocks and real estate,” the investor says. There’s even one that’s underpinned by bottles of fine wine, and a coin linked to whisky barrels. Argentina attempted to launch a crypto cow, with digital tokens guaranteed by grass-fed cattle.

    There’s an arms race to be won here. Treasury Secretary Scott Bessent has said the Genius Act is “essential to securing American leadership in digital assets” and that stablecoins “will expand dollar access for billions across the globe.” This, he said, would be a “win-win-win for everyone involved: users, issuers and the US Treasury Department.”

    If the dollar dominates stablecoins, America could dominate global finance for centuries

    The Trump administration would be the biggest winner of all, though. Not only would mass uptake of dollar-backed crypto lead to a surge in demand for US treasury bonds – making America’s $37 trillion national debt cheaper to finance – but it would completely cement the dollar’s dominance in global transactions and could even replace sovereign countries’ own payment systems across the globe. The European Central Bank is fearful this could lead to a loss of control over Europe’s own monetary policy. If the dollar dominates stablecoins and they’re adopted en masse, America could dominate global finance for centuries.

    Wall Street is listening intently and the stablecoin market is growing – fast. The amount of stablecoins available on Ethereum – one of the most popular blockchains – has doubled in a year to more than$160 billion. The total market is now worth more than $280 billion, made up mostly by dollar-pegged “Tether” (which is also the most profitable company in the world per employee). JP Morgan expects the total market cap of stablecoins to hit half a trillion in two years’ time. Congress followed Japan, which first introduced a Stablecoin Law back in 2022. A couple of other Asian and Arab countries got there before the US, too. And the EU looks set to beat Britain to taking action, with European policymakers looking at launching a digital Euro on the blockchain as soon as possible.

    If countries lean into a private model – with anyone, in theory, able to mint their own digital currencies – the benefits for individual liberty are significant. One of the state’s most powerful tools for exerting control over its citizens would be removed.

    But none of this comes without risk. The Nobel Prize winner Jean Tirole warned in the Financial Times that the unregulated nature of stablecoins could mean governments could be forced into decisions they don’t want to make, should the tokens fall apart during a financial crisis. If doubts arise about the true value of crypto or trust in the link to the underlying real-world asset, then the companies minting the coins could face runs on their deposits. The return on the underlying assets currently used by most mints – cash or government bonds – have historically been pretty poor. Firms issuing stable coins then become incentivized to use riskier underlying assets with higher returns.

    It would be questionable if users and issuers of crypto came begging, caps in hand, to governments for bailouts considering the traditional libertarian, utopian view of crypto that it should be a tool for bypassing the state. But if deposits become large enough, you can count on it happening.

    Still, Trump is pressing ahead. In August, he signed an executive order forcing regulators to allow crypto to be offered within 401(k) retirement plants. Meanwhile, the Trump family stablecoin, USD1, is facilitating billion-dollar deals and is predicted to become the largest stablecoin on the market. Trump wants to plant the world’s crypto capital firmly on an American map. With stablecoins, he just might.

    This article was originally published in The Spectator’s October 13, 2025 World edition.

  • Bessent’s private message reveals a Milei gamble

    Bessent’s private message reveals a Milei gamble

    The first lesson for Treasury Secretary Scott Bessent is that digital photography has totally changed politics, as wiser practitioners have long since realized. You might have got away with reading private communications in public 30 years ago, but you can no longer do so. The second lesson is that if you build an administration on the promise that you will always serve the American interest, certain foreign policy decisions become difficult.

    Bessent has been caught reading a message on his phone from Agriculture Secretary Brooke Rollins expressing her anger at the Trump administration’s deal to establish a $20 billion loan facility with Argentina, or “the Argentine” as Rollins prefers still to call it. How did Argentina’s embattled President Milei respond to being thrown a lifeline? In the words of Rollins, they “removed the export tariffs on grains, reducing their price, and sold a bunch a soybeans to China, at a time we would normally be selling to China.”

    In fact, a “bunch” was 20 shiploads of soybeans, eagerly bought up by China as it tries to sidestep US producers in the midst of a US-China trade war.

    In vain has the White House argued that Argentina’s agricultural produce would even cheaper if the country was allowed to go bust. As far as American soy bean farmers are concerned they have been shafted. 

    That is the reality of a trade war. It might seem like a straightforward battle between one country’s producers and another’s, yet the victims of tariffs imposed by your own government are as likely to reside in your own country – and they are not going to be the least bit happy. But the incident also raises questions about the Trump administration’s support for Milei’s government. As far as Trump is concerned, Milei is a rare friend in a world which often seems mostly hostile towards him. Milei in some ways is cut from the same cloth – he is of the “move fast and break things” school of governing.  Or in his case, slice through them – he famously appeared at political rallies using a chainsaw as a prop, symbolizing what he intended to do to Argentina’s bloated state. He did not disappoint. Whole government departments were expunged in a blizzard of executive orders which possibly left even Trump in awe.

    Milei achieved his first goal of taming runaway inflation, although it is still far from healthy levels – it is down to 33 percent from over 200 percent in 2023 when Milei took office.

    Trouble is, when you start off like that you tend to make many enemies along the way. And now Milei has slipped up – he has cleared out Argentina’s currency reserves in trying to prop up the peso, hence the need for a bailout. It is natural that Trump might want to help out an ideological soul mate in need, but spending US taxpayers’ dollars doing this is not necessarily going to win him many friends at home. If you are a US soybean producer, Argentinian farmers are your rivals, not friends deserving of a bailout.

    If Milei burns through his latest lifeline, he may find himself relying on the IMF alone. The White House vaults are not likely to be opened to him again.

  • Scott Bessent, future UFC fighter?

    Scott Bessent, future UFC fighter?

    Plans have begun on constructing the Octagon on the White House lawn for a UFC fight to commemorate what President Trump is now calling the “Super Centennial,” the US’s 250th birthday next year. And it looks like we might have an undercard ready to go involving the Treasury Secretary.

    Last week, according to Politico, Scott Bessent got into it with top housing finance official Bill Pulte at a private dinner at Executive Branch, an “ultra-exclusive created by and for Trump world’s uberrich.” Cockburn didn’t receive an invite to this birthday party for podcaster Chamath Palihapitiya, even though he and Chamath go way back.

    In any case, Bessent had apparently heard that Pulte was badmouthing him to Trump behind his back, and said, “Why the fuck are you talking to the President about me? Fuck you. I’m gonna punch you in your fucking face.”

    Whoa whoa whoa, said club owner Omeed Malik, but Bessent insisted that Malik throw out Pulte on his rear.

    “It’s either me or him,” Bessent said to Malik. “You tell me who’s getting the fuck out of here.”

    “Or,” he added, “we could go outside.”

    “To do what?” asked Pulte. “To talk?”

    “No,” Bessent replied. “I’m going to fucking beat your ass.”

    As it turned out, no billionaire or millionaire beat anyone else’s ass that night, and the “bonkers” and “unhinged” incident ended “without further incident.”

    Cockburn has long been a consumer of American political history and enjoys most of all the stories of people beating each other with canes on the floor of the Senate. However, this takes Team of Rivals to a new level. Bessent has been pugilistic with his words in other recent moments as well, getting into it with Elon Musk in the White House over who should be the acting IRS commissioner.

    The Treasury Secretary has clear alpha-male anger issues, which is why he belongs in the Octagon. Before Brock Lesnar or whoever takes to the canvas, let’s have Bessent fight a deputy undersecretary of something or other. He can get it out of his system and then get back to his regularly scheduled program of cryptocurrency shilling and tariff apologia.

    Then again, maybe violence isn’t the solution to all our problems. President Trump made a big show today about rooting out “anti-religious propaganda” in schools and donating his family Bible to a Bible Museum. But the Bible doesn’t teach you to threaten to “fucking beat the ass” of political rivals. A Biblical ass is something for a pregnant virgin to ride on to the manger.

    Does the Trump family Bible say anything about turning the other cheek or loving thy neighbor? “If possible, so far as it depends on you, live peaceably with all,” the Good Book says. Unless some bastard is talking about you behind your back to the President. Them’s fighting words.

  • The Art of the Dealmaker-in-Chief

    Who really thought Donald Trump’s America was about to join the stampede of first-world powers promising to recognize Palestine at the United Nations? 

    “Wow!” He exclaimed this morning on Truth Social. “Canada has just announced that it is backing statehood for Palestine. That will make it very hard for us to make a Trade Deal with them.” 

    All over the world, commentators convinced themselves that Trump’s expression of concern on Monday about “real starvation” in Gaza meant he was pivoting with global opinion and against Israel. 

    It turns out, however, that Team Trump is not for turning when it comes to the Middle East. Marco Rubio, the US Secretary of State, has accused the countries now embracing Palestinian statehood of falling for “Hamas propaganda”.

    Trump himself would rather focus all his diplomatic energy on trade, a subject about which he has been positively monomaniacal in recent days. He seems very taken with the new title he has given himself – the Dealmaker-In-Chief. 

    “We are very busy in the White House today working on trade deals,” said the President on Truth Social last night. Three hours later, he announced another “full and complete” agreement with South Korea, involving a 15 per cent tariff on them and $350 billion for the US. That’s on the heels of a deal between America and Japan, South Korea’s big rival in manufacturing terms. 

    The real coup for Trump’s trade strategy this week, however, has been the new framework arrangement with the European Union, which he announced on Sunday from his golf course in Turnberry, Scotland. 

    The EU deal is not simply a major breakthrough in and of itself. It’s also, as the US Treasury Secretary Scott Bessent suggested to my colleague Michael Simmons in Stockholm this week, a useful piece of leverage in the even bigger tariff struggle with China. Bessent was in Sweden for another round of negotiations with his Chinese compatriots and, for US officials, pulling Europe more towards a western trading orbit and less towards the east is an essential thing for the future of capitalism and the free world. China and the US appear to have agreed to take another pause from tariff hostilities – the two sides differ over fentanyl chemicals and Beijing’s role in supporting Iran and Russia. 

    It seems that now Russia is playing on Trump’s mind. On Monday, he suggested he would impose tariffs of up to 100 per cent on Russia if the war in Ukraine didn’t end within two weeks. Then yesterday, as he slapped further tariffs on India, he criticized New Delhi for buying up Russian oil and gas. “I don’t care what India does with Russia,” he said. “They can take their dead economies down together, for all I care.”

    Then, in perhaps the most intriguing trade development of the week, Trump declared a brand-spanking-new deal with Pakistan, including an arrangement to invest in Pakistani oil. “Who knows, maybe they’ll be selling Oil to India some day!” he “truthed”. 

    All jokes aside, Trump’s sudden enthusiasm for Pakistan at India’s expense marks a major shift in US policy in the last few years. Under Obama and Biden and Trump, the US state department has tended to prefer Modi’s India.  

    As ever with Trump, his apparent tantrum with India might conceal a subtler move. That’s the art of the Dealmaker-in-Chief. 

    In the last two decades, Beijing has made enormous investments in Pakistan, particularly in infrastructure through its Belt and Road Initiative. In some ways Pakistan has become an extension of China’s empire. 

    But not all Pakistanis relish the idea of being a Chinese satellite-state. And now the thought of Donald Trump suddenly wooing Pakistan’s government – which recently nominated him for the Nobel Peace Prize, funnily enough – will ring loud alarm bells among the highest ranks of the Chinese Communist party. With Trump’s international agenda, scratch beneath the hilariously crazy surface and you find a more serious campaign to isolate China, China, China. 

    This is taken from the latest Americano newsletter. To subscribe click here

  • Trump has gained the upper hand over China

    Stockholm

    This week, the fate of the global economy could have been decided over a Mongolian barbecue in a Stockholm tourist trap. On Tuesday, just 50 yards from Sweden’s seat of government, Rosenbad – where the US Treasury Secretary Scott Bessent and the Chinese Vice Premier He Lifeng had been wrangling over trade negotiations – the Chinese delegation suddenly exited the talks and headed for lunch near the Mongolian buffet place, where they had eaten the day before. Its windows were covered up and a sign announced it would be closed for three days for a “private event.” The Americans stayed behind, making do with salad.

    China, still the factory of the world, remains the biggest test of Donald Trump’s resolve

    The Chinese had left to “report back to the mothership,” as Bessent later put it. But the mothership apparently did not budge. After talks resumed, it soon became clear that no breakthrough agreement had been struck.

    China wanted another extension to its tariff truce with America, which expires on August 12. Bessent said that was a call for his mothership, Donald Trump. The Treasury Secretary seemed to hint that Trump would approve such an extension. “Just to tamp down that rhetoric, the meetings were very constructive. We just haven’t given that sign-off,” he said, diplomatically.

    The problem is that two major issues haven’t been resolved: fentanyl, and the Chinese support for Russia and Iran. On fentanyl, “we seem to have a sequencing problem,” said Bessent, delicately. The Chinese want Trump’s tariffs to be reduced before they take action to prevent the manufacture of the chemicals that make the drug, which killed 50,000 Americans last year. The US side wants things to happen the other way round.

    Moving on to Iran and Russia, Bessent said: “One thing we are not pleased with, I’m sure the President won’t be, but it’s no secret: the Chinese buying 90 percent of Iranian oil. They’ve contributed $15 billion in dual use technology to the Russian war machine.”

    Insiders and Chinese officials kept a nervous eye on Trump’s Truth Social media account for signs of an angry orange eruption. But Trump, returning from Scotland on Tuesday night, sounded sanguine. “They had a very good meeting with China, and it seems that they’re going to brief me tomorrow,” he told reporters on Air Force One. The President appears to be in a better mood than he was in February, when he seemed hellbent on exploding trade relations with the world and especially China.

    On rare earth metals and magnets, Bessent and his Chinese counterparts appear to have made progress, building on previous meetings in London. Other key topics that didn’t make it to the negotiating table were the future of TikTok and a possible meeting between Trump and Xi – “that’s at the leaders’ level”, the Americans said.

    Officials inside the room told me that most of that time was spent playing a civil but pointed game of “My economy’s bigger than yours”. 

    “We had a big exchange – a very long exchange – and briefings on the economies of both countries,” Bessent reported. The Chinese, he added, “believe that their economy is in good shape.”

    America’s aim is to rebalance China’s financial model – which Bessent calls “the most unbalanced economy in modern times,” the likes of which we haven’t “seen since the British Empire” – away from mass manufacturing and toward internal consumerism. This isn’t just about dollar dominance or bringing in an estimated $300 billion to the US economy from tariffs: it’s about changing China. “They believe that they have a robust consumer economy, and they do not believe that they have a manufacturing surplus that is making its way into the rest of the world. Which I disagree with,” said Bessent.

    Outside the nearby Sheraton and Diplomat hotels, bored police officers milled about. Anyone searching for drama had to look to the press corps, which consisted mostly of Chinese journalists. Trade talks are bigger news in Beijing.

    There was some fretting about “optics” from US officials. Representatives of the US Treasury were concerned about the white-walled room the Swedes provided for Bessent’s television appearance – “hostage vibes,” muttered one aide. A spat over the positioning of the Chinese and American flags outside Rosenbad was also rumoured.

    What’s clear is that Trump has gained the upper hand in the trade war. When he unleashed his tariffs on what he called “liberation day,” the global expert consensus was clear: disaster. The tariffs, we were told, would amount to the largest tax hike on Americans since the 1910s. Inflation would soar. Growth would stall. Businesses and capital would flee.

    But the orthodoxy has, so far at least, been proved wrong. The numbers have come in better than expected. Inflation has stayed close to the 2 percent target. Almost 800,000 jobs have been created this year. Second-quarter GDP is expected to grow at a healthy rate of 2.4 percent. The stock market has rebounded sharply and is up nearly 10 percent since Trump’s re-election. The forecasts were pessimistic.

    America has won in Europe too. Europe has agreed to invest some $1.4 trillion into American energy and infrastructure in exchange for a reduced yet still significant tariff rate of 15 percent. The French Prime Minister called it “submission”.

    America has won in Europe too

    America has effectively challenged Europe to pick a side, Washington or Beijing, and for now Europe has chosen Washington. “I don’t know if they have our back,” said Bessent, “but clearly, the European relationship with the Chinese had a substantial deterioration.” As the US put up the tariff wall, the door opened for increased trade flows between Europe and China.

    According to Bessent, however, the EU has decided that being flooded with more cheap Chinese goods – while Beijing continued to protect its manufacturing at every turn – is not an economic blessing.

    “I had told them: this is what’s going to happen,” says Bessent. “There is now much more unity between the US and the allies. They’re now seeing the downside [of China] the US has seen.”

    The tariff regime, then, has frightened the world away from its dependence on a frequently malevolent Chinese superpower. Trump’s madman tactic makes everyone crazy, but it appears to have worked. The fear that Trump really might go all the way with his threat of 100 percent-plus tariffs, never backing down, has enabled him to walk things back toward normality while achieving his objectives.

    China, still the factory of the world, remains the biggest test of Trump’s resolve. But all sides know that, as America settles its trade disagreements with the rest of the world, it is Xi Jinping who now most needs the tariff pause to continue.