'Is that really where we should be?' Fox host fact-checks Trump official to his face

07 April

Larry Kudlow speaking at the 2015 Conservative Political Action Conference (CPAC) in National Harbor, Maryland. (Image: Gage Skidmore / Creative Commons)

As financial markets continued sliding on Monday as a result of President Donald Trump's new trade duties, one of the president's top economic advisors got a live lecture from a Fox Business host on one very basic tenet of trade policy.

On Monday, Treasury Secretary Scott Bessent spoke with Fox Business' Larry Kudlow (who previously served as the director of the National Economic Council during Trump's first term) around the time markets closed several percentage points down from their previous close on Friday. Kudlow particularly took issue with the Trump administration's calculations in how it decided to impose broad double-digit tariffs on virtually every other country and territory around the world. Kudlow asked Bessent point-blank why the administration was so concerned with trade deficits, given that a trade deficit naturally occurs when one country buys more products from another country than it sells and that the administration hopes to grow its economy faster than its trade partners.

"I don't know if you heard [economist] Art Laffer in the prior interview, but Art doesn't believe that the trade deficit should be a metric. I don't really either," Kudlow told Bessent.

"If you get your tax cuts, and I guess you're well on the way, if you get your deregulation, these are all huge pro-growth items, ok? ... We, the United States, will grow faster than almost anybody. Therefore almost by definition, by growing aster than the rest of the world, were always going to have a trade deficit," he continued. "So I don't know why you'd want to use the trade deficit in a calculation for a reciprocal charge.

The Fox Business pundit then pointed out that while he understood Bessent's point about non-tariff barriers, he then questioned the administration's choice to apply double-digit tariffs to dozens of countries all around the globe. He then told the Treasury secretary that he would have chosen "ten or a dozen countries and really carefully pinpointed it."

"But to apply this to the whole world on the basis of trade deficits, is that really the best in your judgment?" Kudlow asked. "You've been around a long time, you've looked at these, you've done analysis, is that really where we should be at?"

Bessent responded that the administration was focused on trade deficits arguing that trade deficits are the result of "the terms of trade," in addition to "our budget deficit" and "the level of the dollar." Though as journalist Jamison Foster wrote on his Substack, a trade deficit can be best understood as "the guy at the farmers’ market who sells me zucchini and onions." Foster explained: "He sells me stuff but I don’t sell him anything: Trade deficit. But the guy is not ‘cheating’ me, he’s just selling me vegetables.”

Watch the segment below, or by clicking this link.

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