President-elect Donald Trump has proposed implementing tariffs across the board, sparking a debate on who would bear the costs of these tariffs. Scott Bessent, Trump's pick for treasury secretary, has contradicted claims made by Democratic member Ron Wyden that the tariffs would ultimately be paid by workers and small businesses.
Bessent argued that historical tariff data and optimal tariff theory do not align with Wyden's assertions. He explained that in past scenarios where tariffs were imposed, the currency tended to appreciate, offsetting some of the tariff costs. Bessent referenced a hypothetical 10% tariff, suggesting that the currency could appreciate by 4%, thereby reducing the impact of the tariff.
