As possibly the only professional economist in Trump's team, his statements are crucial.

Compiled by: Peng Youquan, Special Contributor to Tencent News

Since April, Trump's so-called reciprocal tariff policy has stirred up significant waves. Global stock markets, especially the U.S. stock market, have experienced severe fluctuations during this month due to Trump's erratic behavior, and Wall Street giants may have never lost so much in such a short time.

On April 23, U.S. Treasury Secretary Scott Bessent delivered a keynote speech at the Institute of International Finance. As possibly the only professional economist in Trump's team, his statements are crucial.

In his speech, he mentioned that the U.S. and China have the opportunity to reach a major agreement: the U.S. can reshape trade balance by strengthening manufacturing, while China can reduce its reliance on exports and focus more on "domestic circulation." If China seriously moves in this direction, the U.S. and China can cooperate hand in hand.

Below is the full text of the speech and Q&A:

Host:

Today, the venue is indeed packed, and the atmosphere is lively. Now, I am honored to invite U.S. Treasury Secretary Scott Bessent to deliver the keynote speech.

On January 28, 2025, Mr. Bessent was sworn in as the 79th U.S. Treasury Secretary, taking on a series of important responsibilities—not only to safeguard the nation's economic strength, promote growth, and create jobs, but also to enhance national security by combating various economic threats and protecting the financial system. Mr. Bessent has over forty years of experience in global investment management, having worked and communicated in more than sixty countries, maintaining close dialogue with leaders and central bank governors. He is widely regarded as an expert in currency and fixed income, and is also a contributor to several economic and business journals.

Next, the Secretary will deliver the keynote speech, followed by a dialogue with Tim Adams. Let us give a warm welcome to the Treasury Secretary!

Bessent:

Thank you for your warm introduction. It is a great honor to be here.

As World War II was nearing its end, leaders of Western countries gathered the most outstanding economists of the time, tasked with an important mission: to establish a new financial system.

In a quiet resort in the New Hampshire mountains, they laid the foundation for "Pax Americana."

The designers of the Bretton Woods system understood that the development of the global economy must rely on coordinated cooperation worldwide. To promote this cooperation, they created the International Monetary Fund (IMF) and the World Bank.

These "sister institutions" were born out of a profound geopolitical and economic turmoil, with the fundamental goal of better aligning national interests with the international order, thereby bringing stability to an unstable world.

In short, their mission is—to restore and maintain balance.

This mission remains the reason for the existence of the Bretton Woods system today. However, as we look around the current international economic system, we see imbalance almost everywhere.

The good news is: the situation does not have to develop this way. This morning, I hope to outline a blueprint for reshaping the balance of the global financial system and revitalizing the international institutions that were originally tasked with safeguarding this system.

For most of my career, I have observed the workings of the financial policy circle from outside the system. Now, I stand within the system, looking outward. I am very much looking forward to working with all of you to restore order to the international system.

To achieve this goal, we must first bring the IMF and the World Bank back to their founding principles.

The IMF and the World Bank have enduring value, but "mission drift" has led them off course. We must push for key reforms to ensure that the Bretton Woods system serves the true stakeholders—not the opposite.

To restore balance to the global financial system, the IMF and the World Bank need to demonstrate clear and decisive leadership. This morning, I will explain how they can play such a leadership role in creating a safer, stronger, and more prosperous economic system for the world.

I also hope to take this opportunity to invite our international colleagues to work together to achieve this goal.

On this point, I want to be clear: "America First" does not mean "America Alone." On the contrary, it represents our desire to engage in deeper, more mutually respectful cooperation with our trading partners.

"America First" is not a retreat; it reflects our willingness to take on more responsibility and exert stronger leadership in international institutions like the IMF and the World Bank. Through strengthened leadership, we hope to restore fairness to the international economic system.

Global Imbalance and Trade

The imbalance I just mentioned is particularly evident in global trade. This is precisely why the U.S. has decided to take action now to reshape the global trade landscape.

For decades, successive U.S. governments have operated under a mistaken assumption: that our trading partners would proactively implement policies that contribute to global economic balance. The reality is that the U.S. has long endured a massive and persistent trade deficit under an unfair trade system.

The intentional policy choices of other countries have hollowed out America's manufacturing base, disrupted our critical supply chains, and even threatened our national and economic security. President Trump has taken decisive action to address these imbalances and their negative impacts on the American people.

This long-standing severe imbalance cannot continue. It is unsustainable for the U.S., and in the long run, it is also unsustainable for other economies.

I know that "sustainability" is a very popular term today. But what I am talking about is not climate change or carbon footprints. I am referring to economic and financial sustainability—the kind that can genuinely improve people's living standards and ensure the normal functioning of markets. If international financial institutions want to fulfill their missions, they must make this sustainability their sole focus.

Since President Trump announced the tariff policy, more than a hundred countries have proactively reached out to us, expressing their desire to participate in the process of reshaping global trade balance. These countries have responded positively and openly to the President's proposal to establish a fairer international system. We are engaging in constructive dialogue with them and look forward to communicating with more countries.

Among them, China particularly needs to rebalance. The latest data shows that China's economy is increasingly moving away from consumption-driven growth and relying more on manufacturing. If this situation continues, China's export-led growth model will only exacerbate the imbalance with its trading partners.

China's current economic model essentially shifts its economic challenges onto exports. This is an unsustainable model that not only harms China itself but also poses risks to the entire world.

China must change. China knows it must change. The whole world knows this. And we are willing to help because we also need to rebalance.

China can start by reducing export capacity and instead support the development of domestic consumers and the domestic market. This shift will help achieve the urgent global rebalancing that is needed.

Of course, trade is only part of the global economic imbalance. The long-term dependence of the global economy on U.S. demand has made the entire system increasingly unbalanced.

Some countries' policies encourage excessive savings, stifling private sector-led growth; others artificially suppress wages, similarly limiting growth. These practices exacerbate global dependence on U.S. demand and make the world economy more fragile than it should be.

In Europe, former European Central Bank President Mario Draghi has clearly pointed out various root causes of economic stagnation and proposed a series of responses. European countries should take these recommendations seriously.

Currently, Europe has taken a belated but necessary first step, which I commend. These measures will provide new sources of demand for the global economy and also mean that Europe is taking on greater responsibility in security affairs.

I have always believed that global economic relations should complement security partnerships.

Between security partners, it is more likely to build a structurally compatible and mutually beneficial economic system. If the U.S. continues to provide security guarantees and open markets, our allies must make stronger commitments to collective defense. Europe's recent actions in fiscal and defense spending are examples of the Trump administration's policies beginning to show results.

U.S. Leadership in the IMF and World Bank

The Trump administration and the U.S. Treasury are committed to maintaining and expanding America's leadership in the global economic system. This is particularly evident in the realm of international financial institutions.

The IMF and the World Bank play a critical role in the international system. As long as they can faithfully fulfill their missions, the Trump administration will fully cooperate with them.

However, in their current state, these two institutions have fallen short.

The two major institutions of the Bretton Woods system must extricate themselves from the current state of being overwhelmed with issues and scattered goals, and return to their core missions. The expansion of issues has weakened their ability to fulfill their fundamental responsibilities.

Next, the Trump administration will further leverage America's influence and leadership in these institutions to push them to focus on their missions and fulfill their roles. We will also demand that the management and staff of these institutions be held accountable for achieving real results.

I sincerely invite all of you to join us in pushing the IMF and the World Bank to refocus on their core missions. This aligns with our common interests.

International Monetary Fund (IMF)

First, we must make the IMF truly the IMF again.

The core mission of the IMF is to promote international monetary cooperation, encourage balanced growth of international trade, foster economic development, and prevent harmful policies such as competitive devaluation of currencies. These functions are crucial for both the U.S. and the global economy.

However, the IMF is currently suffering from "mission drift." This institution, once steadfastly committed to global monetary cooperation and financial stability, is now spending too much time and resources on climate change, gender, and social issues.

These issues are not the IMF's responsibilities, and this deviation has weakened its capacity to address core macroeconomic issues.

The IMF must become an institution that "relentlessly speaks the truth," not just to certain member countries. Unfortunately, the current IMF has chosen to "look the other way." Its 2024 External Sector Report even bears the title "Imbalances are Easing," reflecting a "blind optimism" that indicates an institution more committed to maintaining the status quo than to raising critical issues.

In the U.S., we clearly understand that we must rectify our own finances. The previous administration created the largest fiscal deficit in U.S. history during peacetime, and the current administration is working hard to reverse this situation.

We welcome criticism, but we cannot accept the IMF's silence towards those countries that should be most criticized—especially those with long-standing trade surpluses.

According to its core responsibilities, the IMF must name those countries that have long pursued distorted global economic policies, manipulated currencies, and operated opaquely, such as China.

I also expect the IMF to issue warnings about the irresponsible lending practices of certain creditor countries. The IMF should more proactively encourage official bilateral creditor countries to intervene early and coordinate with borrowing countries to shorten the duration of debt distress.

The IMF must refocus its lending functions, concentrating on addressing balance of payments issues and ensuring that loans are temporary in nature.

When responsibilities are clear and operations are proper, IMF loans are the core manifestation of its contribution to the global economy: when markets fail, the IMF can step in to provide support; in exchange, borrowing countries must implement economic reforms to address imbalances and promote growth.

The changes brought about by these reforms constitute one of the IMF's most important contributions to building a strong, sustainable, and balanced global economy.

Argentina is a typical example. Earlier this month, I visited Argentina to show U.S. support for the IMF's assistance in the country's fiscal restructuring efforts. Argentina should receive IMF support because it has made substantial progress in achieving fiscal benchmarks.

However, not all countries deserve the same treatment. The IMF must hold countries accountable that fail to fulfill their reform commitments and firmly say "no" when necessary. The IMF is not obligated to lend to countries that refuse to reform.

The measure of the IMF's success should be its ability to help supported countries achieve economic stability and growth, rather than the total amount of its loans.

World Bank

Like the IMF, the World Bank must reshape its functional positioning and return to its roots.

The World Bank Group is dedicated to helping developing countries grow their economies, reduce poverty, attract private investment, create private sector jobs, and reduce dependence on foreign aid. It provides transparent, affordable long-term financing support for countries' own development priorities.

Similar to the IMF, the World Bank also offers extensive technical support to low-income countries, helping them achieve debt sustainability, which enables these countries to better cope with coercive and opaque loan terms from other creditors.

These core functions complement the Trump administration's efforts to establish a safer, stronger, and more prosperous economic system in the U.S. and globally.

However, the reality is that the World Bank has also deviated from its original intent in some aspects.

It should no longer expect to obtain "blank checks" through flashy, jargon-filled promotions, nor should it use vague reform commitments to brush off responsibilities.

In the process of returning to its mission, the World Bank must use its resources more efficiently and effectively, and create tangible value for all member countries.

Currently, a key direction for the World Bank to enhance resource efficiency is to focus on improving energy accessibility.

Global business leaders generally point out that unstable electricity supply is one of the main obstacles to investment. The "Mission 300" initiative, jointly launched by the World Bank and the African Development Bank, aims to provide reliable electricity to an additional 300 million people in Africa, which is a commendable effort.

However, the World Bank must further respond to the energy priorities and actual needs of various countries, focusing on reliable technologies that can truly support economic growth, rather than blindly chasing distorted climate financing metrics.

We appreciate the World Bank's recent announcement to lift the ban on support for nuclear energy. This shift is expected to fundamentally transform the energy structure of several emerging markets. We encourage the World Bank to continue moving forward, providing equal access to all technologies that can offer affordable and stable base-load power.

The World Bank should adhere to technological neutrality and prioritize "affordability" in energy investments.

In most cases, this means investing in natural gas or other fossil fuel-based energy projects; in other cases, it includes renewable energy projects equipped with storage or dispatch systems.

History teaches us a simple truth: abundant energy leads to economic prosperity.

Therefore, the World Bank should advocate for a "multi-faceted" energy development path. This approach will not only enhance its financing efficiency but also truly bring the World Bank back to its core mission of promoting economic growth and poverty reduction.

In addition to improving energy accessibility, the World Bank can more effectively use its resources by implementing its "graduation policy."

The goal of this policy is to allow the World Bank to allocate more loan resources to the poorest, lowest credit-rated developing countries. These countries are also where the World Bank's support has the greatest impact on poverty reduction and growth.

However, in reality, the World Bank still provides loans each year to countries that have long met the "graduation" criteria. This continued lending lacks justification, as it crowds out resources for higher-priority projects, stifles the development space for private capital, and weakens these countries' motivation to break free from dependence on the World Bank and shift towards a private sector-driven employment growth path.

Looking ahead, the World Bank must set a clear exit timeline for countries that have already reached graduation standards.

It is absurd to continue viewing China, the world's second-largest economy, as a "developing country."

Indeed, China's rise has been impressive, although this process has come at the expense of Western markets. However, if China wishes to play a role in the global economy commensurate with its strength, it should also complete its "graduation."

We welcome this.

Additionally, the World Bank should promote a transparent procurement policy based on "optimal value," helping countries move away from a procurement model solely oriented towards "lowest price."

"Lowest price" procurement often encourages industries that rely on subsidies and distorted market policies; it may suppress the development of private enterprises, foster corruption and collusion, and ultimately raise overall costs.

In contrast, procurement policies oriented towards "optimal value" are a better choice in terms of both efficiency and development; their strong enforcement will also benefit the World Bank and its shareholder countries.

Regarding this issue, I want to issue the strongest statement on the procurement policy for Ukraine's reconstruction aid: any entity that has provided funding or materials to Russia's war machine, regardless of who they are, is ineligible to participate in funding applications for the Ukraine Reconstruction Fund. No exceptions.

Conclusion

Finally, I want to extend a sincere invitation to our allies once again—please join us in promoting the rebalancing of the international financial system and returning the IMF and World Bank to their founding missions.

"America First" does not mean we will withdraw; rather, it means we will participate more firmly in the international economic system, including playing a more active role in the IMF and World Bank.

A more sustainable international economic system will better serve the common interests of the U.S. and all participating countries.

We look forward to working with all of you to strive for this common goal.

Thank you all!

Q&A Session:

Tim Adams:

Minister, thank you for your wonderful speech, and thank you all for being here today. That line "America First does not mean America Alone" was particularly powerful and seemed to relieve many in the audience. Can we understand that as long as these international institutions return to their original intentions and focus on the right issues, the U.S. will continue to be involved?

Bessent:

Absolutely correct. I made it very clear at my nomination hearing: the U.S. should actively participate in these international multilateral institutions—not just participate, but also make a difference and achieve results. This is not just for ourselves; it is truly for the world.

Tim Adams:

You mentioned rebuilding the global financial order. Twenty years ago, a senior Treasury official said the IMF "lacks the ability to address global imbalances," but every Treasury Secretary since has had different priorities. How will you do things differently? What specific ideas and practices do you have?

Bessent:

The first thing is to clarify the focus. We need to reset the direction and measurement standards of these institutions, bringing them back to their original missions. I come from the private sector and am more accustomed to looking at results and timelines. You know, these issues have been discussed for twenty or thirty years; some countries may think they can wait another hundred years, but we don't have that time.

Tim Adams:

In this regard, China is an unavoidable focus. You are about to meet with your Chinese counterparts. What can be done to make them realize that discussing things further is less effective than taking concrete actions?

Bessent:

Actually, there is no need to say much more; they know in their hearts, they just lack the external push and execution motivation. When I first went to Japan in 1990, it had just experienced an economic bubble burst; in 2012, I met with Shinzo Abe, who was preparing to run for office, and he quickly launched "Abenomics." Ten years later, Japan's economy had significantly recovered. I believe Chinese counterparts will recognize this as well.

I have previously mentioned that we have the opportunity to reach a major agreement between the U.S. and China: the U.S. can reshape trade balance by strengthening manufacturing, while China can reduce its reliance on exports and focus more on "domestic circulation." If China seriously moves in this direction, we can cooperate hand in hand. Of course, as you said, the core of all this is that we need to manage our finances. The current U.S. deficit is 6% of GDP, which is not sustainable.

Tim Adams:

How important is it to incorporate fiscal adjustments into the global rebalancing framework? Can you elaborate?

Bessent:

This is a crucial part. Most of you here have received systematic training in economics and understand that trade deficits stem from three key factors: first, trade policies themselves, including tariffs, non-tariff barriers, currency manipulation, and subsidies for labor and production factors; second, budget deficits, which, the higher they are, the greater the "attraction" to imported goods, while also pushing up interest rates; third, the dollar exchange rate, as the U.S. has always adhered to a "strong dollar" policy, allowing the market to determine its value. A strong dollar does not refer to high or low quotes but to winning capital favor and market confidence through sound policies.

Our problem is not insufficient income but excessive spending. I suggest that President Trump keep the long-term deficit around 3% of GDP, aligning it with 2% inflation or nominal growth, and achieve higher growth through good policies.

Tim Adams:

You mentioned the "dollar privilege" concept proposed by Bob Rubin and Valéry Giscard d'Estaing in the 1960s. Some people see it as a burden rather than a privilege. What is your view on the dollar's status as the global reserve currency? Is this status likely to fade over time?

Bessent:

I believe that during my lifetime, the dollar will remain the world's primary reserve currency. And to be honest, I don't think any country really wants to replace it. The euro was once highly anticipated, but its recent rapid appreciation has become a burden for export-oriented economies. To maintain the dollar's status, a key element is to rebuild trust in international institutions.

Tim Adams:

You recently visited Europe, and many feel that Europe is brewing a "revival." What is your perspective? Is this a good opportunity for Europe to take on more global demand?

Bessent:

It is indeed a good opportunity, though there are also many challenges. I must say— we should thank President Trump; he has persuaded several European leaders to do what they haven't been able to do in twenty-six years: convince Germany to increase fiscal spending and stimulate the European economy. This is both fiscal stimulus and a way to share the burden of European defense. As I often say, economic security is national security, and national security is economic security. If Europe's new plans can work, I will fully support them. I recently had a private conversation with the Spanish finance minister, and he is very confident about the EU's future military spending, which I also strongly affirm.

Tim Adams:

Minister, you are currently advancing many key directions: U.S.-China rebalancing, European opportunities, and the rebalancing of U.S. domestic demand (including the fiscal deficit). What specific expectations do you have for the IMF moving forward? How should Ms. Georgieva and her board act?

Bessent:

In a word: return to the basics. The IMF has indeed strayed in recent years, with too many and too diverse issues; it needs to "clear the weeds" and refocus on core tasks like balance of payments and balanced growth, while setting clear goals and performance measurement standards.

Tim Adams:

Let's talk about energy again. You specifically mentioned nuclear energy in your speech. The U.S. is now the world's largest oil producer, producing about 13 million barrels a day. In what areas should we push harder in the future? How can the World Bank better support fossil energy, nuclear energy, and other forms of energy?

Bessent:

Abundant energy is the soul of economic growth. We need to help countries design a development pace that suits them: first "crawl," then "run," and finally "sprint." True sustainable development must start with stable base-load power supply. Some people are still indulging in fantasies, thinking that renewable energy alone can solve everything, but the reality is that pumps need to run, electric heating needs to be on, and hospitals need uninterrupted power. Even a middle-income country like South Africa faces frequent power outages. Therefore, we need to stabilize the base-load power supply first, and then consider how to gradually integrate renewable energy and other energy sources, rather than letting renewable energy take the lead and causing industries to fail to operate normally.

Tim Adams:

Finally, let's talk about financial intermediation. Capitalism without capital is just an empty "ism," and the U.S. capital markets and financial intermediaries are crucial both domestically and internationally. What is your vision for future regulation? How should this industry develop?

Bessent:

Recently, private credit has been a hot topic. I think it represents the diversified development of the U.S. financial system, but part of its current operation is outside regulation, partly because post-2008 crisis regulations have been too tight, compressing the space for traditional financial institutions. We plan to rely on the Financial Stability Oversight Council (FSOC), in conjunction with the Federal Reserve, the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation (FDIC), to create a more flexible and resilient regulatory framework that stimulates the vitality of compliant finance. One of the unique aspects of American finance is the large number of community banks and small banks, which provide 70% of the nation's agricultural loans, 40% of small business loans, and housing loans. In contrast, most other G7 countries are dominated by a few large banks. Previously, Wall Street led the way; now it's time for "Main Street" to share in the benefits. Many small banks have been hesitant over the past decade due to regulatory pressure, and the real economy has stagnated as a result. We are determined to fix this.

Tim Adams:

Thank you all again. The Treasury has always been the "voice of sober reason," and what you have heard today is indeed that rational voice. Wishing you all the best! Let's give another warm round of applause to the Treasury Secretary!

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