Treasury Secretary Scott Bessent on Tuesday outlined the Trump administration's approach to economic statecraft in a speech in which he outlined five core principles guiding the White House's strategy.
Bessent spoke Tuesday night at the Economic Club of New York's America 250 gala dinner and said that as the nation celebrates that milestone, it requires Americans to "reflect on the creation of our country, of course, but no less, on its condition."
He said that as America shaped the postwar world order, it made choices that have created vulnerabilities that led strategic industries and critical supply chains to migrate overseas, as well as expose U.S. firms to face unfair competition abroad.
"We've emboldened other countries to exploit our dependence as leverage. And to repair those imbalances with the world is not to retreat from it. On the contrary, it is to engage on terms that make America stronger. It is to insist on trade that is fair, reciprocal, and consistent with our national interest," Bessent said. "And it is to more closely bind what we should have never allowed to cleave: our economic and national security."
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Bessent discussed five core principles for the Trump administration's approach to economic statecraft. Here is a breakdown of the key points from each.
Bessent said that the modern economy requires the U.S. to assume a leadership role in areas ranging from semiconductors, artificial intelligence (AI) and quantum computing, to advanced manufacturing, critical minerals and pharmaceuticals.
He added that in the modern economy, "supply chains are the domain in which that leadership is tested, which requires a hard look at the resiliency of those supply chains.
"Of course, supply chain resilience does not require every component to be domestic from beginning to end. That would be unrealistic and unnecessary. But it does compel us to know where our vulnerabilities are and to reduce them before a crisis rears itself," Bessent said. "It requires diversifying away from dangerous concentrations."
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Bessent said that the U.S. is the "best economic partner in the world" due to the depth and dynamism of its markets, the dollar's dominance and innovation throughout the economy – though he said those benefits aren't unconditional for U.S. trading partners.
"Countries cannot seek access to our market while denying fair access to theirs," he explained while criticizing discriminatory taxes, industrial policies, intellectual property transfers and efforts to evade sanctions.
He said that while the U.S. and other countries alike have the right to regulate in ways that serve their own public interests, there is a discernible difference between that and discrimination against American firms which the administration wants to remedy.
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Bessent said that the next era of economic competition will be more nuanced and that failing to lead efforts to help write the rules of the new economy could allow authoritarian or mercantilist systems to create a global economy that would "become more coercive and less favorable to American interests."
"If America and our partners set open, secure, market-based standards, then the 21st century economy will tilt toward freedom and prosperity by rewarding innovation, protecting intellectual property, and ensuring that competition is not distorted by discrimination," he said.
Bessent noted the dollar's role as the world's reserve currency and how it's based on the "depth of our markets, the strength of our rule of law, the credibility of our institutions, and the scale of our economy."
That has given the U.S. "enormous advantages" ranging from lower borrowing costs, deeper capital markets and more influence over the global financial system – but it also imposes obligations to crack down on things like sanctions evasion, financing of terrorism, cybercrime and corruption.
"Treasury's job is to protect the integrity of the financial system by rooting out these abuses – and to deploy this power with discipline. Sanctions must be targeted, enforceable, and connected to strategy," he said, adding it requires diplomatic coordination with partners to ensure compliance.
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Bessent said that the "purpose of American economic statecraft is to connect national power with household prosperity," which he said reflects an "economy in which our working families are not merely consumers of what the world produces, but participants in what America builds."
"America's competitive advantage has never been confined to the bounty of our natural resources or the depth of our capital markets," he said.
"It has always resided in the character and the capacity of our people; the entrepreneur with the temerity to turn an idea into enterprise, the worker with the ability to master new trades and new technologies that didn't exist a decade ago, and the institutions that allow their freedom and confidence to flourish," Bessent explained.
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He said that the American people can "expect policy that rewards work, investment, production and innovation. Leadership that understands how productive capacity is power. An economy whose success is measured not merely by what it produces, but by whom it lifts."