'America was being played': Mohamed El-Erian reacts to Bessent’s speech, says the US once put low prices above all other concerns. That time is over

The Trump administration is re-engineering the U.S.’s goals in the global economy towards national security and self-reliance and away from ensuring a stable supply of consumer goods at low prices.

That’s the blunt assessment from Mohamed El-Erian, a prominent economist at the Wharton School of Business at the University of Pennsylvania. He wrote in a New York Times op-ed published (1) recently that the well-being of investors, companies and households is “increasingly dictated by a fundamentally different calculus” under President Donald Trump.

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On June 23, Treasury Secretary Scott Bessent delivered a speech (2) at the Economic Club of New York that laid out new principles meant to anchor American statecraft in the coming years. In the post-World War II order, Bessent said, the US had focused relentlessly on preventing the spread of Soviet communism and it flung open the doors to its markets to allies.

“The success of a system does not absolve us from revisiting its assumptions,” Bessent said.

Cheap goods take a backseat to national security

In El-Erian’s assessment, financial and business interests are “now being actively sidelined” in favor of domestic politics and safeguarding U.S. sovereignty.

He argued the status-quo began evolving in Trump’s first term and changed little under his successor, President Joe Biden. Now it’s being turbo-charged with Trump’s freewheeling tactics that emphasize U.S. might against rivals and even longstanding allies.

In his recent speech, Bessent said the overriding concern of the U.S.’s “political and commercial class” for decades had been locking in a stable supply of cheap mass goods. Now, he says that goal is “no longer sufficient” in an era when foreign supply chains can come under strain from conflicts such as those in Ukraine and Iran, along with the COVID-19 pandemic.

That part of Bessent’s remarks was reminiscent of another speech that he delivered (3) in March 2025, a month before Trump began waging a trade war with a barrage of double-digit “reciprocal” tariffs.

“Access to cheap goods is not the essence of the American Dream,” Bessent said at the time in what almost served as a preview for the rest of Trump’s second term. For his part, El-Erian believes consumers should expect higher prices in exchange for more resilient supply chains.

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What investors and CEOs can expect

El-Erian assessed what comes next from the Trump administration’s pivot towards a more nationalist approach to trade and the US role in financial markets.

“The more likely outcome will be the broader weaponization of tariffs, investment and payment systems against economic rivals,” El-Erian wrote, adding that a “more forceful industrial policy” that relies on export restrictions and the increased application of “secondary sanctions” on third parties in international disputes.

Congress, for example, has drafted a bipartisan package (4) to impose sanctions on countries still trading with Russia, including those buying Russian oil, gas and uranium. The languishing legislation still needs Trump’s approval before GOP senators attempt a floor vote.

Governments can expect that “fence-sitting” will carry significant costs since the Trump administration has embraced brow-beating allies into accepting US terms on trade, investment and tech standards, El-Erian said. Investors will likely discover that asset prices will be influenced by government intervention, and portfolios must adjust to evolving national security realities.

“Those who fail to change risk being caught off guard by sudden policy shifts, punitive tariffs and systemic fragmentation,” El-Erian wrote. “For leaders across all sectors, recognizing this reality and adapting to it will become a defining competitive advantage.”

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The New York Times (1); U.S. Department of the Treasury (2), (3); Senator Lindsey Graham (4)

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