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The traditional gathering of former Treasury secretaries to welcome a newly minted one into the fold is usually a lighthearted and pleasant affair. But when the group convened this month, on President Trump’s “Liberation Day,” the tone was strikingly serious.
The dinner, organized by former Treasury Secretary Steven T. Mnuchin, took place at a moment of tumult for the U.S. economy. The president had upended global trade with punishing tariffs on both allies and adversaries, and Treasury Secretary Scott Bessent was at the center of it, defending a policy that many in the room viewed as economic malpractice.
“The mood was somber,” said W. Michael Blumenthal, 99, who led the Treasury Department in the Carter administration and was in attendance.
Mr. Bessent was pressed over the strategy behind the tariffs and the impact that they would have on the economy, according to Mr. Blumenthal and other people familiar with the dinner. At times, Mr. Bessent elevated his voice when his predecessors confronted him about Mr. Trump’s approach.
Before joining the administration, Mr. Bessent had expressed his own doubts about tariffs. But Mr. Trump’s protectionist trade instincts are notoriously hard to corral.
As a former hedge fund manager who founded Key Square Group, Mr. Bessent wrote in a letter to investors just last year that he was skeptical of tariffs: “Tariffs are inflationary and would strengthen the dollar — hardly a good starting point for a U.S. industrial renaissance.”
But as Treasury secretary, Mr. Bessent has had to publicly stick close to the administration’s pro-tariff stance. He now argues that tariffs will not be inflationary but will instead inflict a one-time “price adjustment” on the economy.
Some of his comments have raised eyebrows. After China responded to Mr. Trump’s tariffs by imposing higher levies on American products, Mr. Bessent downplayed the potential impact on the U.S. economy, saying “So what?” In his view, the United States holds the upper hand, because China is reliant on exports to America.
As markets suffered their worst rout in years, Mr. Bessent suggested that people close to retirement were probably not paying much attention to the falling value of their nest eggs.
Some top Republican lawmakers, including Senator Ted Cruz of Texas, have also come out against the tariffs.
Mr. Bessent has managed to moderate Mr. Trump’s approach, to a degree. During a trip to Mar-a-Lago last Sunday to brief the president on the volatility, Mr. Bessent persuaded him to pause so-called reciprocal tariffs on dozens of countries and begin trade talks with those nations.
However, the deepening confrontation with China suggested that there will be more volatility as Mr. Bessent engages in debates with Peter Navarro, Mr. Trump’s trade adviser, and Howard Lutnick, the commerce secretary, who have counseled a more hawkish approach.
Mark Sobel, who served at the Treasury Department for nearly 40 decades, noted that Mr. Bessent was being credited with scaling back the reciprocal tariffs but raised questions about how he has publicly justified them.
Ultimately, however, final decisions over tariffs will lie with Mr. Trump.
During the dinner with Mr. Bessent, the former secretaries offered encouragement, counsel and historical perspective amid their concerns about Mr. Trump’s policies, people familiar with the matter said.
In one exchange, Mr. Summers, who served in the Clinton administration, told pointed stories about George Shultz, who was nominated to be Treasury Secretary by President Richard M. Nixon in 1972 and stood up to his boss over defunding universities and using the Internal Revenue Service to audit political enemies.
Mr. Blumenthal said he wished Mr. Bessent luck in a job that is more complicated when “what is best for country is different than what the president wants.”
Ana Swanson contributed reporting.
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