LIVE: U.S. Treasury Secretary Scott Bessent Speaks at Reagan Economic Forum 2026 | AF15

Thank you very much. It's an honor to be here and I'd like to thank the Ronald Reagan Presidential Foundation and Institute for inviting me to join you today. Of course, this year's forum carries special significance as we celebrate 250 years of the American story. But milestones of this magnitude demand more than ceremony. They ask something of us. They invite us to reflect not just on the creation of our country, but on its condition. And as we focus today on America's economic future, they compel us to confront and correct decisions that have diminished our sovereignty in recent decades. President Reagan himself understood that renewal begins with reflection. One thing that has made our republic great, he said, is that we don't hide from our mistakes. We learn from them. Then we go on and do things better than we did before. That is the spirit in which I want to speak with you today with candor and with confidence in our capacity to deliver another 250 years of American economic leadership. The truth is that for too long America had been asleep. We mistook comfort for strength. We substituted efficiency for resilience and consumption as a measure of prosperity. We told ourselves that so long as goods were cheaper overseas, it did not matter whether factories went dark in Michigan, Ohio, or Pennsylvania. We assumed that supply chains would always function smoothly and adversaries would always behave responsibly and the invisible hand would correct vulnerabilities that too few in public life had the courage to confront. And while we reassured ourselves with those assumptions, risk accumulated all around us. Somewhere along the way, we lost sight of a foundational principle that previous generations understood instinctively. Economic security is national security. For a nation that cannot manufacture, mine, ship, or refine its needs gradually cedes its strength and sovereignty to others. That is a dangerous dependency for any country. It is an unacceptable one for the United States of America. Now, nations rarely cede their security in a single moment. More often they drift into dependence through a series of politically expedient decisions. For our part, we made a series of mistakes, some bipartisan, others ideological, and many defended long after their cost became impossible to ignore. One was treating trade policy as though it existed apart from national strategy. We convinced ourselves that we could pursue commercial partnerships in one silo while managing security relationships in another as if the world would honor these distinctions. But a nation that relies on a rival for critical inputs, finances the rise of countries that do not share our interests, and allows its productive base to erode while promising to defend the international order will find sooner or later that these two silos collapse into each other. As damaging as our willingness to extend strategic trust where it had been not earned, China's accession to the WTO and the granting of permanent normal trade relations were sold to the American people as steps that would level markets and moderate behavior. Instead, we left our workers to compete against state-led subsidies, excess capacity, and practices that distort trade and undermine reciprocity. We assumed the rules-based system would discipline these behaviors only to find that in too many sectors it accommodated them and that in the name of efficiency we began to celebrate just in time while neglecting just in case. The pandemic did not create our brittle supply chains so much as expose them. Suddenly, the world's most advanced economy found itself partially dependent on foreign suppliers for semiconductors, large capacity batteries, critical minerals, and medicines that we no longer produced here at home. Regrettably, our recovery from the pandemic did not bring reform under the prior administration. Today, the United States still imports most of its rare earth minerals that are essential to the technologies that will shape military and economic power in the 21st century. Only a small share of the active pharmaceutical ingredients that we use in the United States are made here and American shipbuilding capacity which once helped to secure victory in war and prosperity in peace has shrunk to a fraction of global production. So when I say America has been asleep, I do not mean that no one warned us. In fact, many did. Workers warned us when their plants shuttered and communities decayed. Military planners warned us when supply chains narrowed. Manufacturers warned us about subsidized competitors and dumped products. Public health officials warned us about pharmaceutical dependencies. The warning lights were glaring all around us. But our political class preferred the comfort of old formulas. Cheaper was always better. Offshoring was inevitable. Industrial policy was unfashionable. And strategic dependence was acceptable so long as the cost remained invisible. Beneath every one of those mistakes lay a more basic failure in our philosophy. In reducing economics to consumption, we forgot production. We measured abundance at the checkout counter rather than at the factory gate. We talked about GDP but not enough about its composition. And we prized low-cost inputs without first asking whether a nation can remain sovereign when it loses command over the things that matter most. A country cannot outsource its industrial commons, ignore strategic concentration, and expect to remain secure. For manufacturing is more than output on a balance sheet. It is a reservoir of practical capability. Engineers and welders, tool and die makers and logistic networks, plant managers and workers who know how to solve problems on the factory floor. When the ecosystem is strong, a country can adapt quickly. When it is hollowed out, adaptation becomes slower, more costly, and less certain. We saw this during COVID and the scramble for ventilators, masks, and other medical equipment. We saw it again as the war in Ukraine reminded the world that high-intensity conflict consumes weapons and munitions at a pace far beyond peacetime assumptions. Surge capacity cannot be conjured overnight. It must be built before a crisis arrives. And a country that allows its industrial base to shrink in the quiet years should not be surprised when it struggles to replenish stocks in the dangerous ones. In a crisis, the nation with a broad and skilled industrial base has options. The nation that has hollowed out that base only has excuses. America should never again put itself in a position where its security depends on supply chains it does not control, factories it no longer maintains, or skilled trades it failed to preserve. That is why the president's agenda matters. Reasonable people can debate the calibration of any particular instrument, but the central strategic insight is undoubtedly sound. Trade policy, industrial capacity, and national security are inseparable, and to allow foreign dependencies to degrade any one of these domains is to allow them to define America's future. So on his first day back in office, President Trump issued the America First Trade Policy Memorandum, a sweeping directive to Treasury, Commerce, Homeland Security, USTR, and other agencies to stop treating trade as a technocratic afterthought instead of an instrument of national strategy. Last April, the president declared a national emergency tied to the cumulative effects of foreign trade practices and announced reciprocal tariff actions framed explicitly around national and economic security. Again, people can debate design, sequencing, and scope. Healthy democracies should debate those questions, but no one should miss the larger point. Chronic non-reciprocity, industrial hollowing, and strategic import dependence are not questions of commerce alone. They are fissures in our country's foundation. A few weeks later, President Trump signed executive action on processed critical minerals and derivative products under Section 232, expressly linking import dependence to risk for national security, defense readiness, and price stability and economic resilience. Some have tried to weaponize critical minerals against us, but this administration is ensuring they will not succeed. On maritime strength, President Trump signed an executive order to restore America's maritime dominance, established a new office of maritime and industrial capacity at the National Security Council, and called for a maritime action plan to rebuild US shipbuilding capabilities. This is what it looks like to connect industrial capacity, logistics resilience, workforce development, and national security in one strategic frame. Finally, on pharmaceuticals, President Trump signed an executive order to fill the strategic active pharmaceutical ingredients reserve so that America is never again caught flat-footed when access to critical drug components is at risk. Last month, the White House also highlighted further action to impose tariffs on patented pharmaceutical products while noting parallel Section 232 investigations involving personal protective equipment, medical consumable devices, and robotics. The strategic message is unmistakable. Supply chain resilience in medicine will no longer be an afterthought. This broader reorientation is also visible in the administration's trade agenda for 2026 as we work to secure reciprocity, strengthen domestic production, and align America's external economic relationships with our core national interest. Taken together, these efforts reflect the broader principle that President Trump has articulated clearly. Economic security is national security. But let me be direct about what that doctrine does not mean. It does not mean retreating from the world. On the contrary, it means engaging with it on stronger, fairer, and more sustainable terms. It does not mean severing ties indiscriminately. It means distinguishing healthy interdependence from dangerous overdependence. It does not mean rejecting efficiency. It means refusing to worship efficiency when efficiency leaves our nation exposed. And it does not mean treating allies and adversaries alike. It means bringing our trading relationships and our security relationships back into alignment by building supply chains with trusted partners where appropriate, rebuilding capacity at home where necessary, and ensuring that the economic architecture supporting American power strengthens American security. Of course, America still holds enormous advantages. Among them, the world's deepest capital markets, extraordinary innovators, abundant energy potential, leading universities, and unmatched entrepreneurial culture, and workers who can outbuild and outcompete anyone so long as the playing field is fair. All we needed was a government willing to declare that as decline is a choice, renewal can be won, too. So yes, while America slept, our vulnerabilities grew. While America slept, too many leaders accepted failed supply chains as the price of modern life. While America slept, we let industrial policy erode and main street decay. We tolerated unfairness in the name of stability and conflated market access with strategic success. But America has awakened. We are alert to the fact that a resilient economy is the foundation of a strong republic. That we can measure the health of our economy not merely by what it produces but whom it lifts. That secure supply chains matter as much as stock indices. That productive capacity is power. That trade policy, industrial policy, and national security policy must all fit together or they will each fail separately. So, let me end where I began with President Reagan's reminder to identify where we went wrong and to recover our faith in what can go right. If we learn from our mistakes, if we rebuild what we neglected, if we reward production as well as consumption, if we prize resilience alongside prosperity as President Trump has been doing, then this country will not simply patch over our vulnerabilities. It will enter a new season of national strength with a more robust main street and industrial base than ever before. Safer supply chains, more secure medicines, more reliable access to critical minerals, a revived maritime capacity, a financial system aligned with a national purpose, and trading partnerships that reinforce rather than undermine our security relationships. Indeed, the strength of this republic lies in not denying that the old consensus failed. Instead, we must restore resilience where complacency took hold, rebuild capacity where dependence took root, and above all, recover the confidence to believe a nation that knows how to build, invent, produce, and lead is never destined for decline. While America slept, our vulnerabilities grew. But under President Trump's leadership, we are alert to the risk we can no longer ignore and attuned to the responsibility we can no longer defer. Under President Trump, we have awoken to morning again in America and our best days, I believe, still lie ahead. Thank you all. I look forward to exploring these themes in further conversation with Larry. Thank you.

Yeah. So the president was very clear in the cabinet meeting what he was looking for on the straits, free and open access as we saw before February 27th, and that Iran must give up their highly enriched uranium and cannot have a nuclear weapon. And to be clear, I think one of the things that has gone unappreciated and unnoticed here is this is the first time the Iranians have been willing to discuss the nuclear subject like, you know, before we have the right to do this undisputed. And so I think between five and a half, six weeks of an incredibly successful military campaign and then Operation Economic Fury where we have really cut them off and they are at the end of their tether now financially. I think 40 or 50% of the troops aren't getting paid. Police aren't reporting to the station. Inflation's probably over 200%. They're having to give out food vouchers. They have turned off the internet. So there was an information vacuum and we'll see as the Iranians have engaged as they could. I would point out we did not have regime change but we changed the regime. The first level leaders decapitated, the second level decapitated. So we're dealing with the third level. And it's very tough because on one side we have a theocracy with the clerics, on the other side we have a thugocracy with the IRGC. And you've got to convince both sides.

Well, Treasury, we're doing the financial blockade and the US Navy, who I want to tell you about a group that hasn't been this active since World War II, it's the Navy. They've done an incredible job. And when I talked to General Kaine and Secretary Hegseth, they said these young people aren't afraid. They want to fight. This is what they signed up for. And some of the precision where they blockaded the Iranian ports with virtually zero intrusions have been amazing. Kharg Island, which is the Iranian oil export facility, is shut down. The blockade did that. We think they have the lowest amount of oil on the water. Their only client is China. And I would point out that the Iranians made a very big strategic mistake because everyone said, 'Oh, well, the Iranians attacked the GCC and the infrastructure and that really makes them invulnerable.' On my side of my duties, they made my job so much easier because before, many of our great Gulf allies were a little less than transparent about their banking system. 'Oh no, we don't have any Iranian oil.' And then 2,200 shells and missiles and drones here, 500 or 600 there. All of a sudden it's 'Oh, here they have at it.' So we've frozen Iranian bank accounts after they started getting bombed by Iran. But it was a big strategic failure on the financial side and we jumped right in. They've been very good partners. I believe that we have seized about a billion dollars of their crypto and just outright grabbed the wallets. Some of them may be typing in right now and realize their wallet had been grabbed. And we are working with our allies all over Europe to grab villas and houses and properties. This is money that's stolen from the Iranian people. But you've frozen the offshore accounts. People may not understand that the Revolutionary Guard, they own so many of the businesses. They've been stealing money from the Iranian people for decades and decades. They're all living high off the hog, retirement accounts and condominiums, God knows where. We think they were stealing $400 or $500 million a month divided between 80 leaders.

Well, it's like Woody Allen said when he talked about the mafia, it's a good margin when you consider they don't pay for paper clips.

Look, the war will end. We'll get to the other side of this. The economy has been very resilient through all this. For many families, it's not nothing, but it's been less than $200 in extra gasoline cost. And I don't have it with me, but all the Democrats want to talk about now is beef and gasoline.

We'll see. But I can tell you the one thing we're not going to do is what the Biden administration did where they came out and said it's a vibe session. The American people don't know how they're feeling. That was 21.5% stated CPI inflation. Real wages grew about 17%. So big loss in purchasing power. But our friend Jason Trenard has something called the Everyman Index or Common Man Index and that was up 35 or 38%. So that was a 15% or 16% decline in real purchasing power and Americans felt that. The price levels have gotten elevated. It's tough to bring the price level down, but what we can do is generate real wage growth, which I think we're going to get back to as soon as we're on the other side of this Iran conflict. So, you were mentioning in your talk we are here at this conference celebrating the 250th birthday of America and looking ahead for the next couple of hundred years. I can't help but ask you, are we really going to have a $250 bill with Donald Trump's picture on it?

So, for the 150th, there was a Calvin Coolidge coin with his image on it. We are going to have the image of President Trump on a coin and there is a proposed legislation in the House to put President Trump on the $250 bill. As Treasury Secretary, I am only mandated to do two things with the design of the currency. At present, it has to be someone who is not living and it must say 'In God We Trust' and do whatever else I want. And I think that if you are the president just like Calvin Coolidge was for the 150th, if you're the president for the 250th, President Trump should be on there. And for any of you who want to geek out on monetary theory, there's something called seigniorage. So we print, Treasury prints currency, the Fed distributes it, and we have about $2.5 to $2.6 trillion outstanding and that's a free loan. So we put currency out there and we don't have to pay any interest on it. So with seigniorage, I think that you get the $250 bill. I think a lot of people are just going to put those away and hold them. It's a good free loan.

I think that this is the most important government benefit for young people since the GI Bill. 38% of Americans have no exposure to our great equity market. They don't participate in the innovation, the dynamic US economy, great managements. For them it is just a foreign concept. So with the Trump Accounts, any child born during President Trump's term gets a $1,000 seed investment from Treasury for these and they're going to go into low-cost index funds and they will be able to see every day on their phone what the account's doing. Families with children under 18 can open a Trump Account and they can put up to $5,000 in there that'll compound tax-free until age 18. At age 18, they can roll it into a traditional retirement plan or take it out to start a business, for education, down payment on a home. And the other thing we're seeing with these Trump Accounts is that we are seeing some of our great philanthropists, Michael and Susan Dell, $6.25 billion to American children.

Well, I think we're creating a whole new class of shareholders. In nutrition, there's this idea of a food desert. You don't have access to good food. I've done a lot of work on financial literacy. I push for it. And I think that there was the idea of a financial desert that if people don't have exposure, many of them can't open a Charles Schwab account or E-Trade or Robin Hood or any of the others. So this is going to give them an account rather than giving a toy for someone's birthday. You cut the price of the toy in half and give the toy and then put $20 into that account. So you can constantly top it up. It's worth a lot more than a welfare check. It's worth a lot more every way you look at it. At Treasury, we went up yesterday. I encourage all of you to go to trumpaccounts.gov. We have five, we might be up to six learning modules because these are families who've never participated in the stock market before. I was a kid from South Carolina small town and growing up I just knew something bad happened on Wall Street in 1929. That's what I knew about Wall Street. And now I think they're going to be able to see it on their phone. They'll sit around the dining room table. Their families will add to it. Many states are going to top these up. We've got 20 states so far that I think are going to add to these. And I do think it is a new kind of philanthropy because now we have all these foundations. A lot of them do good work, but there's a lot of bureaucracy. They have buildings, they have boards, they have dinners. If you want to give directly to the children of America, just give to the Trump Accounts.

It was great. President Reagan would say, it was a new day at the Fed. So, we now have the Warsh Fed. The Treasury Secretary and the Fed chair have lunch or breakfast every week. It's a home game and an away game. So I did the away game at the Fed. Their food's much better because they don't have a budget. They print their own money.

Apparently not. One hears. But it's good. Renewal and change is good. And I think we are going to see a new sheriff in town.

You approve of that? 100%. And I also think we're going to get back to basics in terms of accountability, credibility. What's the purpose of the Fed? Because for your career is longer than mine, but for a long time the Fed just ran in the background. It wasn't 'Oh, it's Fed day, it's the Fed meeting, cover the press conference, all day event, all these governors out giving speeches and popping off.' And I think we are going to see much more focus, much more credibility. And at the end of the day, financial markets, it's all about credibility.

The president made the decision. I ran the process. President made the decision. I never put my thumb on the scale for Kevin Warsh who I'd known for 20 years. I think he's an incredible choice. And the president got there for all the right reasons. And the president understands that the more credible you are, the more work the financial markets will do for you. So no pressure at the moment. Look, a lot of the publications wanted to be alarmist. To the extent I had any success in my 35 year Wall Street career was usually doing the opposite of what was on the front page. When I saw over the past couple of weeks 'What a terrible time to start as the Fed chair,' I thought no, it's a great time. Interest rates have spiked, inflation has spiked. The tough thing would have been to come in in February when the market was pricing in two or three rate cuts for the year. Inflation looked like it was going to come back down to target. Growth was high. Much better to come in now. And look, you all can be the judge. I'm not saying whether it's causation or correlation, but rates peaked the day before Chair Warsh was sworn in.

No, nothing's changed. And again, I was in the currency market for 35 years, and I think people have the wrong notion of what a strong dollar means. Strong dollar isn't the price on the screen every second, every minute, every day, every week. What a strong dollar means is that we are doing the right things to set our economy on a good course, that people will want to hold dollars, that they feel safe and secure, that their money will get back to them, that they will have high real returns. And I think we've done that whether it's through trade policy, tax policy, or energy policy. President Trump with his policies has made the United States the best place whether you want to be in the liquid markets or to come build your factory. You will have great certainty on tax, great certainty on energy, and great certainty on our workforce.

Everything we have done since the ceasefire began has been defensive. And Admiral Cooper, General Kaine, Secretary Hegseth have been very clear about that. And again, what's important to realize here, just as in our government we have hawks, doves, in between, they have people who want to keep up a kinetic fight and then they have people who want to settle. So they are also hashing it out. But there are three scenarios. We have the deal. We don't have the deal, but we just maintain the blockade and we keep squeezing them. And I think every day that goes by is much worse for them. Or we go back to kinetic action. And President Trump, you know it, Larry, I know it. He likes to create the most leverage for himself. You're going to keep the blockade, financial and economic embargo going. We'll see that anything that's taken off is taken off slowly, and there'll be milestones that the Iranian regime would have to meet. And I can tell you we put more sanctions on yesterday. We sanctioned their two airlines. We've got some other financial targets. There's a lot more that we can do if we have to. And there's some things that we can take off to help the Iranian people.

Well, thank you, Larry.