Treasury secretary targets pivot away from China and suggests trade policies could bring mortgage relief
US Treasury Secretary Scott Bessent said mortgage affordability was a key lynchpin of President Trump’s economic priorities as the US-led tariff war continues to rumble on.
Bessent described “mortgages, cars, and real wage gains” as Trump’s economic focus amid that trade chaos, downplaying the upside risk to other import prices. “What I’m saying is the American dream is not ‘let them eat flat screens,’” Bessent said during an appearance on NBC’s Meet the Press.
“If American families aren’t able to afford a home, don’t believe that their children will do better than they are. The American dream is not contingent on cheap baubles from China – it’s more than that. And we’re focused on affordability but it’s mortgages, it’s cars, it’s real wage gains.”
Bessent discussed a targeted “decoupling” from China. “We do not want a generalized decoupling from China. But what we do want is a decoupling for strategic necessities, which we were unable to obtain during Covid and we realized that efficient supply chains were not resilient supply chains.”
According to Bessent, this approach prioritizes resilience in supply chains for strategic necessities like steel, critical medicines, and semiconductors. While broad “Liberation day” tariffs were recently slashed from 145% to 30% for 90 days, industry-specific tariffs remain. Bessent noted, “We are going to create our own steel. [Tariffs] protect our steel industry. They work on critical medicines, on semiconductors.”
Critics say the move, intended to revive domestic manufacturing, contrasts with a Yale Budget Lab report estimating that the average tariff rate of 17.8% could cost median US households approximately $2,800 annually.
Bessent was speaking amid an acute national housing affordability crisis. The S&P CoreLogic Case-Shiller US National Home Price Index has nearly doubled over the past decade, a surge Federal Reserve chair Jerome Powell attributed to supply constraints. Powell himself acknowledged the severity, noting at a press conference, “Where are we going to get the supply?”
Zillow’s June analysis estimated a US housing shortage of 4.5 million homes as of 2022. Compounding this, high mortgage rates, currently around 6.67%, make borrowing expensive. The administration’s emphasis on these areas suggests potential policy initiatives aimed at increasing housing supply or mitigating borrowing costs.
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