US Treasury Secretary Scott Bessent stated in an interview on Friday that the recent stock market plunge is primarily tied to the debut of China’s DeepSeek artificial intelligence (AI) tool, rather than President Donald Trump’s economic policies. Bessent’s comments, made during a conversation with conservative commentator Tucker Carlson, downplay the influence of Trump’s administration in the ongoing market downturn.
Addressing the market’s recent decline, Bessent argued that “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.” He further clarified his perspective, explaining, “If I were to analyse in my old hat, and this is the only time I’m going to talk about it … what’s happening with the market I’d say it’s more a Mag 7 problem, not a Maga problem.”
The “Mag 7” reference points to the seven top-performing technology stocks, collectively known as the Magnificent 7, which had been fueling market growth before the recent sell-off. Meanwhile, “Maga” refers to Trump’s political slogan, “Make America Great Again.”
Bessent’s remarks come amidst a turbulent period for US stocks, which have dropped approximately 10% over the past two days. This decline follows Trump’s announcement of a new, more aggressive global tariff regime, which has caused alarm among analysts and investors. Many experts, including economists and the head of the Federal Reserve, have warned that the tariffs could lead to inflation and impede economic growth.
While Trump’s tariff policies have been largely blamed for the recent market turmoil, the first signs of a downturn emerged in late January. That’s when China’s DeepSeek, a new AI model developed at a significantly lower cost than current alternatives, was unveiled. This launch resulted in a massive one-day loss of nearly US$600 billion in value for Nvidia, a key player in the Magnificent 7.
