Trump's "Chief Economic Advisor" Kudlow: Will not weaken the US dollar, insists on using tariffs as a negotiating strategy

As the 2024 US presidential election approaches, Trump regains a leading edge, his economic proposals have become the focus of the entire market, and Trump's "economic adviser" has come out to defend against market criticism.

On Tuesday, Trump's "economic adviser" and potential Treasury Secretary candidate Scott Bessent gave an interview to the Financial Times, stating that if Trump is re-elected, he will not adopt a policy to weaken the US dollar or cut trade. Bessent emphasized that Trump supports the US dollar maintaining its status as the world's reserve currency and sees tariffs as a negotiation strategy.

At the same time, Bessent also mentioned that the current Federal Reserve Chairman Powell's term will end in 2026, and Trump will appoint a new Federal Reserve Chairman, but he will not interfere with the Fed's independence.

It is worth mentioning that Bessent was formerly the Chief Investment Officer of Soros Fund Management, and gained great success in the past by shorting the pound and yen. Now, he is considered an important economic advisor in Trump's campaign, with analysts suggesting that if Trump is elected, Bessent may be a candidate for the new Treasury Secretary. Trump has praised Bessent multiple times, calling him "one of the top analysts on Wall Street."

Defending Trump: No weakening of the US dollar, no interference with Fed independence, inflation will not soar

Recently, Trump and his running mate JD Vance have called for a devaluation of the US dollar to promote US exports, raising concerns about a weakening dollar in the market.

Bessent responded to this by saying:

If Trump is re-elected, the new government will not adopt policies that devalue the US dollar. It is expected that the Trump administration will support a strong dollar policy, consistent with US policy for decades.

Trump supports the US dollar as the world's reserve currency, and the reserve currency fluctuates based on market conditions. With good economic policies, the dollar will naturally strengthen.

He also defended Trump's commitment to imposing tariffs on imported goods, stating that these are "extreme" positions that may be softened in negotiations with trading partners.

Furthermore, Bessent mentioned:

The current Federal Reserve Chairman Powell's term will end in 2026, and Trump will appoint a new Federal Reserve Chairman, but he will not interfere with the Fed's independence. Trump comes from a business background and has a deep understanding of economics.

Ironically, previous reports have pointed out that Bessent once proposed the idea of a "shadow" Federal Reserve Chairman, including nominating a "shadow" Fed Chairman, abolishing the Fed's "dual mandate" and focusing only on controlling inflation, as well as attempting to reshape the Fed system.

Additionally, Bessent criticized the view that Trump's tax cuts promise would increase inflation:

This is too crazy. The idea that Trump would cause inflation is absurd. Under the leadership of Biden-Harris, we have experienced the most serious inflation in forty years

On the other hand, despite studies showing that Trump's economic promises could double the increase in national debt compared to Harris, these models are "flawed" and do not fully consider how tax cuts can promote growth.