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Scott Bessent said the US should increase sanctions on Russian oil producers to force Moscow to negotiate with Ukraine as he criticised the Biden administration for not being tougher on Vladimir Putin’s regime.
The comments on Thursday by Donald Trump’s nominee to be Treasury secretary pushed up oil prices, as traders considered the prospect of tighter global crude supply. The new administration is also expected to target Iranian and Venezuelan oil with tougher sanctions as Trump seeks to increase economic pressure on the US’s adversaries.
“As part of [Trump’s] strategy to end the Ukraine war, I will be 100 per cent on board for taking sanctions up, especially on the Russian oil majors, to levels that would bring the Russian Federation to the table,” Bessent told senators.
He claimed the US sanctions on Russian energy were “not fulsome enough” because “the previous administration was worried about raising prices during an election season”.
International oil benchmark Brent rose by more than $1 after Bessent’s comments to more than $81 a barrel.
His remarks during his confirmation hearing on Capitol Hill come four days before Trump returns to the White House with a plan to implement sweeping tax cuts, higher tariffs and aggressive deregulation, in a big shift from the outgoing Biden administration.
US equities have risen since Trump won the November 5 election, while Wall Street has embraced his agenda, with bosses of the world’s biggest banks — which announced bumper profits this week — saying optimism about the new administration’s economic plans had unleashed “animal spirits”.
However, big bank executives, speaking this week, also cautioned that Trump’s threats to impose sweeping tariffs could be inflationary.
The billionaire hedge fund boss used his grilling by the Senate Finance Committee — which must approve his nomination before it goes to a full vote in the chamber — to defend those plans.
While he did not offer new details, Bessent said Trump would use tariffs to tackle unfair trade practices, raise revenues for the US government and strike deals with other countries.
Bessent also said would push China to buy more US agricultural products, such as corn and soyabeans, under the terms of the purchasing deal Trump negotiated with Beijing to ease trade tensions during the Republican leader’s first administration. Trump would continue to aggressively apply export controls to US goods going to China, he said.
“We should have a very rigorous screening process for anything that could be used in AI, in quantum computing and surveillance, in chips,” he said.
Bessent also stressed his support for extending Trump’s tax cuts beyond their expiry at the end of the year, saying it was “most important economic issue of the day”.
Failure to extend the cuts for people and businesses, introduced by Trump in 2017, would trigger an “economic calamity” for the US, “and as always with financial instability, that falls on the middle and working class people”. A fierce political battle over tax policy is expected to dominate Congress this year.
On the economic outlook, Bessent said he believed inflation would continue to move closer to the Federal Reserve’s 2 per cent target and insisted that the Trump administration would respect the central bank’s independence on monetary policy.
But he warned that the US Treasury would struggle to use its “borrowing capacity” in times of crises due to America’s deteriorating fiscal position.
“I am concerned because several times the Treasury of the United States has been called upon to save the nation, whether it was the Civil War, the Great Depression, second world war, or the recent Covid epidemic,” Bessent said.
He added that “with what we have now, we would be hard pressed to do the same”.