Scott Bessent, the U.S. Treasury Secretary, has attributed the recent stock market decline to the Chinese AI tool DeepSeek rather than President Donald Trump‘s policies.
What Happened: During an interview with conservative commentator Tucker Carlson, Bessent emphasized that the market downturn began with the announcement of DeepSeek.
He stated, “For everyone who thinks these market declines are all based on the President’s economic policies, I can tell you that this market decline started with the Chinese AI announcement of DeepSeek.”
“…What’s happening with the market I’d say it’s more a Mag 7 problem, not a MAGA problem,” Bessent added. The “Mag 7” refers to seven high-performing tech stocks that had previously driven the market higher.
Despite a 10% drop in U.S. stocks following Trump’s new global tariff regime announcement, Bessent downplayed the impact of these policies. He also reiterated the administration’s commitment to a “strong dollar” policy, dismissing claims that tariffs were meant to weaken the dollar.
The dollar has declined nearly 6% against major currencies since Trump’s inauguration.
Why It Matters: The market’s reaction to President Trump’s tariff announcement has been significant. The U.S. markets faced a severe downturn, with S&P 500 companies losing $5 trillion in value since the tariffs were announced.
This has led to concerns about potential global turmoil and negative impacts on consumers, as highlighted by former Microsoft CEO Steve Ballmer in an interview with CNBC. Ballmer warned that the escalating tariffs could have far-reaching effects on the economy.
Furthermore, a Goldman Sachs analyst has pointed out that Trump’s tariffs could shift U.S. spending from goods to services, creating uncertainty for e-commerce and advertising industries. This uncertainty is expected to slow corporate decisions and impact economic activity for the remainder of the year.
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