Treasury Secretary Scott Bessent is wrongly advising this administration by downplaying the role tariffs will have on overall inflation. Bessent told reporters not to be concerned over tariffs as they will simply be a “one-time price adjustment” when that is far from reality. These tariffs come with massive side effects that will ripple across the global economy.
“Look, can tariffs be a one-time price adjustment? Yes… I would hope that the failed team transitory could get back together and think that nothing is more transitory than tariffs if it’s a one-time price adjustment,” Bessent said in reference to Biden administration officials saying that the historic inflation of several years ago was “transitory.” He later added, “The economic program is a whole of government, holistic program, and I think that we could get a one-time price adjustment,” Bessent said, adding that “across the continuum, I’m not worried about inflation.”
Bessent and others who buy into the tariff myths argue that when a tariff is imposed, prices simply adjust once, and the market stabilizes. Instead, the artificially raised cost snowballs. The first hit is the tax on direct goods, the second hit comes when that cost is passed down to businesses who pass it down to consumers.
Take steel tariffs, for example. When tariffs are imposed on imported steel, domestic manufacturers don’t just absorb the cost; rather, they pass it on to maintain a profit. That means everything that uses steel, from cars, appliances, construction materials, etc., becomes more expensive. That price increase does not stop at the initial tariff application. It continues to cascade as higher input costs force further adjustments throughout the supply chain.
When tariffs raise prices, workers naturally demand higher wages to keep up with the rising cost of living. This leads to what economists call a wage-price spiral—higher wages push costs up even further, which forces businesses to raise prices again.
Reduced supply and higher prices can lead to stagnation, which is what we have been experiencing for the past few years. These tariffs will do more harm than good for the people who will be forced to cover the costs.
