Trump Economic Advisor Signals 'Permanent' Tariff Structure
Comments from potential Treasury Secretary Scott Bessent suggest a long-term protectionist shift, creating divergence between domestic producers and import-reliant sectors.
A top economic advisor to former President Donald Trump has signaled the intent to make sweeping tariffs a "permanent" feature of U.S. economic policy, a move that is already creating ripples across equities and corporate strategy.
Scott Bessent, a leading candidate for Treasury Secretary in a potential Trump administration, stated last week that the administration's tariff policies would continue indefinitely, regardless of a pending Supreme Court decision on their legality. This clear articulation of a long-term protectionist stance is sharpening the divide between domestic industries poised to benefit and import-dependent sectors bracing for sustained cost pressures.
The remarks come as the Supreme Court is expected to rule in mid-December on the legality of tariffs imposed under the International Emergency Economic Powers Act (IEEPA). Bessent, however, has made it clear that a potential administration has a "backup plan" to maintain the tariff structure using other authorities, effectively cementing them as a core component of its economic arsenal. "The tariffs were right," Bessent commented, asserting they provide critical leverage in trade negotiations and bolster domestic manufacturing.
Market reaction has been predictably divergent. Steel and aluminum producers have seen their stocks climb on the prospect of reduced foreign competition. In late November, steel-related equities rallied on expectations of a potential 25% blanket tariff, as investors priced in higher domestic demand for producers like U.S. Steel and Cleveland-Cliffs.
In stark contrast, the retail sector is preparing for a protracted battle against higher costs. Several major retailers, including Costco, have initiated legal action to seek refunds on tariffs paid, signaling the significant financial burden they impose. For retailers, persistent tariffs translate into a difficult choice: absorb lower margins or pass on higher prices to consumers, a move that could stoke inflationary pressures.
Analysts warn that the broader economic consequences of a permanent tariff regime could be substantial. A sustained, wide-ranging tariff policy would likely invite retaliatory measures from major trading partners. Both the European Union and China have historically responded with duties on U.S. exports, targeting key sectors like agriculture and industrial goods. According to an analysis by the Tax Foundation, such a trade conflict could reduce long-run U.S. GDP and wages while raising consumer prices.
The policy also presents a double-edged sword for the U.S. manufacturing sector. While intended to protect domestic industries, tariffs on raw materials and intermediate goods can increase input costs for American factories. Automakers and other complex manufacturers who rely on global supply chains could face diminished competitiveness due to higher costs for essential components like steel and aluminum.
Investors and corporate leaders are now closely watching the Supreme Court for its impending decision, which will determine the legal framework for trade policy heading into 2026. However, Bessent’s comments suggest that regardless of the court’s ruling, the debate over trade and protectionism will remain a central driver of market sentiment and a key risk factor for the global economy. The long-term strategy, as Bessent made clear to BNN Bloomberg, is one that fundamentally reshapes America's trade relationships, for better or worse.