Larry Summers critiques Scott Bessent's tariff claims

Larry Summers has criticized Treasury Secretary Scott Bessent for his comments on new U.S. tariffs on Chinese imports. Summers, who previously served under President Bill Clinton, argues that Bessent's claim that Chinese producers will absorb the tariffs is misleading. In a social media post, Summers pointed out that economic principles contradict Bessent's position. He noted the rise in U.S. steel prices since early 2025, which he believes shows that American consumers are actually feeling the effects of these tariffs. Steel prices have increased significantly, impacting costs for products like cars. Bessent had expressed confidence earlier this month that the tariffs would not lead to higher prices for consumers. The Treasury Department did not comment on Summers' criticism, but a White House official suggested that the U.S. could source goods from other countries, reducing the impact of the tariffs on American consumers. The tariffs imposed during the second term of the Trump administration are larger than those in his first term, targeting over $1 trillion of imports compared to $380 billion previously. Economists are concerned that these aggressive tariff policies are raising overall U.S. tariff rates to levels not seen since the 1940s. As the economic climate grows uncertain, many businesses plan to pass most of the new costs to consumers. A recent survey showed that 73% of CFOs expect to pass on tariff increases, with many indicating they would pass nearly all of the costs onto consumers. On Monday, U.S. stock markets rose due to indications that future tariffs may be more targeted. However, Trump continues to threaten new import taxes, which could further complicate trade relations with key partners like China and India. Critics have expressed worry that the rationale for these tariffs is becoming increasingly disconnected from traditional economic logic.