Scott Bessent Brushes Off EU Tariff Threats—Here’s Why Markets Don’t Care

Trade war noise hits a wall of institutional indifference.

Geopolitical Theater Meets Capital Realities

Another week, another tariff threat from Brussels. The script feels familiar: stern warnings, retaliatory measures floated, and diplomatic channels buzzing. Yet, for key market players like Scott Bessent, the response is a collective shrug. The EU's warnings over U.S. tariffs are being dismissed not as a strategic blunder, but as background noise in a louder financial symphony.

The real action isn't in press releases—it's in capital flows. While politicians posture, asset allocators are busy elsewhere, navigating a landscape where traditional leverage points are losing their grip. It's a classic case of bark versus bite, where the market's teeth are sunk into more substantive trends.

Old Rules, New Game

This dismissal underscores a broader shift. The tools of 20th-century economic statecraft—tariffs, sanctions, trade blocs—increasingly bounce off the decentralized, agile nature of 21st-century capital. Threats that once would have triggered portfolio rotations now barely register on the volatility index. Capital has found more porous borders and digital bypasses.

It’s almost cynical how efficiently money ignores political grandstanding—focusing instead on hard yields, technological disruption, and demographic realities. The finance jab? The most potent 'retaliatory measure' nowadays isn't a tariff; it's a better risk-adjusted return elsewhere.

The takeaway is blunt. Market veterans aren't listening to the threats because they're too busy following the money. And right now, the money is whispering that old paradigms are running on fumes. The closing bell rings, and the geopolitical headlines fade, leaving only price action as the ultimate truth teller.

Trump raises tariffs while Bessent defends legal authority and Fed stance

Trump announced a 10% tariff on goods from eight European countries starting February 1. The tariff rises to 25% in June unless there is a deal tied to the purchase of Greenland.

French President Emmanuel Macron called the tariff unacceptable and said he will ask the EU to use its strongest retaliation tool. Scott showed no concern about that response.

On the same show, Scott said it is very unlikely the Supreme Court will block Trump’s use of emergency powers to impose tariffs. A ruling could come as early as this week. “I believe that it is very unlikely that the Supreme Court will overrule a president’s signature economic policy,” Scott said. “They did not overrule Obamacare. I believe that the Supreme Court does not want to create chaos.”

He pointed to a June ruling where the court upheld a key Affordable Care Act provision that created a panel recommending preventive care services insurers must cover at no cost. Scott used that example to argue the court avoids destabilizing major policy.

“The national emergency is avoiding a national emergency,” Scott said. He said Trump is using economic pressure to prevent a military conflict. He framed Greenland as part of a wider strategy that includes Arctic competition, a planned Golden Dome missile shield, and past European reliance on Russian energy. He said that energy dependence helped fund Russia’s war against Ukraine.

When asked if Trump’s posture toward Europe was a bargaining tactic, Scott said the president is not changing course. “Europeans project weakness, US projects strength,” he said. He added that Trump believes stronger security is not possible without Greenland becoming part of the United States.

Scott also spoke about the Federal Reserve. He said the Senate WOULD be “quite happy” with any of the four candidates being considered to replace Fed chair Jerome Powell. “I believe we will probably be hearing from the banking committee soon,” Scott said.

He called for more oversight of the Fed, noting it can print its own money. Last week, Scott publicly denounced the Justice Department decision under Trump to open a criminal investigation into Powell, drawing a clear line between oversight and prosecution.

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