Washington, June 26 EST: For a man barely known outside financial circles, Scott Bessent is already leaving fingerprints on one of the most politically loaded bills of the year. This week, the newly installed Treasury Secretary quietly asked Congress to kill Section 899, a retaliatory tax provision that would have empowered President Trump to slap steep penalties on foreign investors—essentially weaponizing the tax code in defense of U.S. tech firms.
Bessent’s request wasn’t couched in fanfare. It came in a formal note to lawmakers on June 26, after he helped broker a G7 agreement reinforcing the OECD global tax reforms—a deal that gave him the diplomatic capital to act. But the implications of what he did are anything but minor. In pulling the plug on Section 899, Bessent dismantled a pressure point Trumpworld was eyeing as leverage in an increasingly hostile international tax landscape.
It also marked the first real test of Bessent’s power—and signaled that, despite the “obscure official” label floated in headlines, this is a Treasury Secretary prepared to exercise influence quickly, and in full view of the global financial system.
Section 899: A Blunt Tool Aimed at Allies
At its core, Section 899 was retaliation wrapped in legislative fine print. The provision would have allowed the executive branch to unilaterally impose up to 20% levies on income earned in the U.S. by foreign investors—particularly from nations implementing digital services taxes or Pillar Two minimums targeting U.S. tech giants like Amazon, Google, and Meta.
It was designed as a signal: push our firms, and we’ll push your capital. But to Wall Street and foreign pension funds, it read more like a red flag—threatening to disrupt U.S. capital markets at a time when the dollar’s supremacy is already under question and Treasury yields are treading a delicate line.
The White House never publicly sold the measure with enthusiasm. Its inclusion felt more like a Trumpian marker—aggressive, transactional, and designed to keep trading partners on their heels.
Bessent’s Move: Not Just Policy, but Power
What makes Bessent’s role striking isn’t just that he acted—it’s when and how. Fresh into the job, with no deep political constituency or cable-news footprint, he moved against a provision many on the Hill saw as a bargaining chip. And he did so by anchoring it to a multilateral tax deal, giving Congress a clear alternative path forward without inviting political backlash.
It’s a technique that would make past Treasury power brokers—from Robert Rubin to Hank Paulson—nod in approval: use global consensus as domestic cover, and let the politics trail the economics.
For a Trump administration that prefers sharp elbows to quiet handshakes, Bessent’s intervention stands out. But it also reflects a growing reality: fiscal sovereignty today isn’t just about taxing power—it’s about how those taxes land globally, and whether they invite retaliation that the market won’t forgive.
Why It Landed When It Did
Congressional Republicans were already struggling with the procedural headaches around Section 899. Senate parliamentarians flagged it as unlikely to survive the budget process, and centrists worried it could become a poison pill in a bill otherwise focused on tax cuts and spending caps.
Bessent offered an elegant exit. By pointing to G7 alignment and OECD guardrails, he effectively said: We can get the global cooperation we want—without setting fire to capital inflows or risking retaliatory spirals.
It’s a reminder that real influence in Washington rarely announces itself. It works through memos, meetings, and moments when everyone else is looking the other way.
A Cabinet Member Worth Watching
Scott Bessent’s resume—hedge fund operator, investor, donor—isn’t typical for a Treasury Secretary. But his instincts in this case were sharp, and his timing precise.
He didn’t need to say that Section 899 was reckless. He just made it clear that keeping it would cost more than it was worth—diplomatically and financially.
And in this era of performative politics, that kind of realism is rare. It’s also valuable.
New Jersey Times Is Your Source: The Latest In Politics, Entertainment, Business, Breaking News, And Other News. Please Follow Us On Facebook, Instagram, And Twitter To Receive Instantaneous Updates. Also Do Checkout Our Telegram Channel @Njtdotcom For Latest Updates.
A political science PhD who jumped the academic ship to cover real-time governance, Olivia is the East Coast's sharpest watchdog. She dissects power plays in Trenton and D.C. without bias or apology.
