US Treasury chief Bessent backs using US financial power as foreign policy tool

U.S. Treasury Secretary Scott Bessent spoke on Tuesday about the potential use of financial power by Washington as a foreign policy tool, aiming to bolster alliances in the Western hemisphere. He emphasized that the U.S. possesses a "balance sheet" that can be utilized for this purpose, citing Argentina as a prime candidate for such intervention due to President Javier Milei's favorable policies.

Bessent's remarks marked a shift in acknowledging Trump's administration's readiness to leverage U.S. financial resources to influence political and economic landscapes in foreign nations. The Trump administration has sought to sway political contests across Latin America and bolster its presence in the region, including ordering the seizure of Venezuelan President Nicolas Maduro and executing strikes on boats in the Caribbean.

Critics argue that these actions are imperialistic and result in extrajudicial killings, while proponents view them as efforts to protect U.S. interests and address issues like drug trafficking and illegal immigration. Bessent also mentioned the U.S. joining Japan in a rare joint yen-buying intervention on July 31, demonstrating their commitment to preventing a decline in the yen and Japanese government bonds from affecting global markets.

However, despite Bessent's confidence in his interventions, the real-world impact has been mixed, with the yen rallying and long-term government bond yields rising despite the Treasury's goals.