Despite a steep drop in the US stock market last week, Treasury Secretary Scott Bessent says that President Donald Trump’s new tariff plans aren’t the real reason behind the fall.

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Instead, Bessent pointed the finger at DeepSeek, a Chinese artificial intelligence platform launched earlier this year, claiming that its release had a bigger impact on investor confidence than any political decision.

“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,” Bessent said during an interview with Tucker Carlson posted on Friday.

Also read: 'China has been hit much harder': Trump downplays Beijing's retaliatory tariffs but admits trade war 'won’t be easy'

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'I'd say it's more a Mag 7 problem, not a MAGA'

DeepSeek, which rivals platforms like ChatGPT, introduced its latest version in January. According to Bessent, it triggered the downturn in the share prices of leading US tech firms, often referred to as the “Magnificent 7.”

“I'd say it's more a Mag 7 problem, not a MAGA problem,” Bessent told Carlson.

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Bessent, a former hedge fund manager before becoming Treasury Secretary under Trump, explained, “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.”

Also read: 'Not just taxes, it’s a safety net': Why India has sky-high tariffs?

The “Mag 7” includes seven top-performing technology companies whose success has heavily influenced the stock market’s recent highs. “MAGA,” meanwhile, refers to Trump’s “Make America Great Again” slogan.

US markets have fallen by roughly 10% over two days since Trump introduced a global 10% import tax, with even steeper tariffs for certain countries. But signs of weakness were already visible earlier in the year when DeepSeek’s free AI assistant launched, boasting lower data use and cheaper running costs. That launch led to a massive selloff — including a record $600 billion loss in market value from AI chipmaker Nvidia, one of the Magnificent 7.

Trump officials play down market concerns

Bessent is not the only Trump official downplaying the market reaction. Commerce Secretary Howard Lutnick has also dismissed concerns, suggesting the market response is unrelated to Trump’s tariff announcement.

Also read: Netanyahu to meet Trump in Washington this week, first foreign leader to discuss tariffs in person

(With inputs from agencies)