Treasury Secretary Scott Bessent projected confidence in America’s economic foundations on Tuesday, insisting that the underlying U.S. economy remains strong and that annual growth could still surpass 3 percent or even reach 3.5 percent this year, even as the U.S.-Israeli war with Iran continues to roil energy markets and unsettle global forecasts.

Speaking at the WSJ Opinion Live event in Washington, Bessent pushed back against recent downgrades from international institutions, framing them as an overreaction to temporary shocks stemming from elevated oil prices and supply disruptions.

“I think the underlying economy remains strong,” Bessent said. “I do think that the growth could easily exceed 3%, 3.5% this year, still.”

His remarks come amid fresh turbulence triggered by the conflict that erupted in late February. The fighting has driven oil prices sharply higher, with Brent crude trading above $100 per barrel, prompting the United States to enforce a blockade of Iranian ports and shipping routes through the Strait of Hormuz. That narrow waterway, through which roughly 20 percent of global oil and natural gas exports flowed before the war, has become a focal point of volatility, tightening supplies, and amplifying inflationary pressures worldwide.

Bessent cast the International Monetary Fund’s decision on Tuesday to cut its 2026 global growth outlook—now pegged at 3.1 percent in its baseline scenario, assuming a relatively short-lived conflict—as overly pessimistic. The IMF cited energy price spikes and Hormuz-related disruptions as key factors, warning that a more adverse scenario could see world growth slow to 2.5 percent or lower, potentially pushing the global economy toward recession if hostilities drag on.

The World Bank has similarly revised its projections upward for inflation risks. Bessent, however, maintained that such adjustments underestimate the durability of U.S. domestic momentum and the market’s capacity to adapt, pointing to a well-supplied oil environment beyond the immediate Gulf disruptions.

The administration has already signaled pragmatic steps to ease price pressures, including earlier considerations of lifting sanctions on Iranian oil already at sea, potentially releasing up to 140 million barrels, or roughly 10 to 14 days of global supply, to prevent excessive tightening.

Bessent has emphasized that the oil market itself is adequately supplied when accounting for floating cargoes and alternative sources, suggesting that any short-term volatility will give way to longer-term stability once the conflict resolves.

On the trade front, Bessent addressed the future of U.S. tariffs following the Supreme Court’s February ruling that President Donald Trump had overstepped his authority by imposing sweeping duties under the International Emergency Economic Powers Act (IEEPA). The decision struck down those emergency-based tariffs, forcing a reset in the administration’s trade toolkit. Bessent indicated that equivalent measures could soon return through alternative legal avenues, such as investigations under Section 301 of the Trade Act of 1974.

“The tariff could be back in place at the previous level by beginning of July,” he said, referring to options the Trump administration is actively pursuing.

This timeline would allow the White House to reimpose targeted or broader duties after completing required probes, restoring leverage in ongoing negotiations with trading partners while sidestepping the legal constraints highlighted by the Court. The move fits into a broader strategy of using trade policy to address perceived imbalances, even as the Iran conflict adds another layer of complexity to global supply chains and inflation dynamics.

Bessent’s upbeat assessment contrasts with the cautionary tone from multilateral bodies, yet it aligns with the administration’s emphasis on American economic strength as a buffer against external shocks. Domestic indicators, ranging from steady consumer spending to a resilient labor market, provide some support for his view that the United States can weather the energy-driven headwinds better than more import-dependent economies.

Still, prolonged closure or restricted access through the Strait of Hormuz risks feeding higher gasoline prices and broader cost pressures that could eventually test consumer confidence and corporate margins.

By downplaying the IMF’s revisions and reaffirming a path to solid growth, Bessent sought to project steadiness at a moment when markets remain sensitive to developments in the Middle East. His comments also preview a more assertive trade posture later this year, blending fiscal optimism with a determination to reassert tariff tools as a core element of economic statecraft.

Even as the war in Iran continues to cast a shadow over regional markets and cross-border logistics, Chinese autonomous driving companies are pressing ahead with aggressive expansion plans in the Middle East, signaling strong confidence in the Gulf’s regulatory stability and long-term smart mobility ambitions.

The latest move comes from Didi, which plans to begin its first overseas robotaxi test in the United Arab Emirates later this year, marking a significant milestone in its international expansion strategy. The company disclosed the plan on Wednesday, shortly after co-founder Zhang Bo, who heads its autonomous driving unit, addressed a UAE-China business cooperation forum in Beijing.

The announcement coincided with a high-level state visit by Abu Dhabi Crown Prince Sheikh Khaled bin Mohamed bin Zayed Al Nahyan, who met Chinese President Xi Jinping in Beijing on Tuesday. That diplomatic backdrop adds weight to the commercial announcement, suggesting that autonomous mobility is becoming part of the broader economic and technology partnership between China and the UAE.

Besides Didi, at least three other major Chinese robotaxi players are already advancing commercial deployments in the emirate, transforming Dubai and the wider UAE into one of the most active international launch markets for autonomous driving technology outside China.

Leading the charge is WeRide, which earlier this month launched a fully driverless, fare-charging robotaxi service in Dubai’s Jumeirah and Umm Suqeim districts, two of the city’s busiest coastal and tourist corridors. Riders can book the service directly through Uber’s app, marking one of the first large-scale commercial Level 4 deployments in the region.

The scale of WeRide’s ambitions in the Gulf is weighing heavily. In February, the company and Uber announced plans to deploy at least 1,200 robotaxis across Dubai, Abu Dhabi, and Riyadh by 2027, building on existing fully driverless operations and pilots already underway. WeRide said it already has more than 200 robotaxis in the region.

This expansion has continued despite regional instability, including the ongoing Iran conflict. In fact, the company explicitly noted that it remained committed to long-term operations in Dubai “in challenging times,” underscoring how Gulf markets are increasingly being treated as strategic long-term growth regions rather than opportunistic tests.

Pony.ai is also moving forward. In late March, chief executive James Peng said the war had not affected the company’s application for a commercial license in Dubai, describing the conflict as a short-term issue. The company had already secured testing approval from Dubai’s Roads and Transport Authority in September and is now pursuing commercial operations in the emirate.

For robotaxi companies, regulatory approvals, fleet deployment, and local partnerships are capital-intensive and long-dated decisions. The willingness to proceed amid geopolitical tension suggests these firms view the UAE as sufficiently insulated from broader regional risk.

Baidu’s robotaxi arm, Apollo Go, has also joined the push. On April 1, the company announced that residents and visitors in Dubai could begin hailing fully driverless rides through its app, with the initial rollout starting with 50 vehicles and plans to scale to more than 1,000 robotaxis over the next few years, according to Dubai’s media office. This means Dubai now hosts parallel commercial deployments from multiple Chinese AV firms, a development that is rare even among major global cities.

The broader significance is that the Middle East, particularly the UAE, is rapidly emerging as the preferred overseas proving ground for Chinese autonomous vehicle companies.

Analysts believe there are several reasons for this. First, the region offers comparatively faster regulatory pathways and strong state backing for smart-city initiatives. Second, governments in the Gulf are actively integrating autonomous transport into long-term urban mobility strategies. Dubai, for example, has publicly targeted 25% of all journeys to be autonomous by 2030. Third, the geography and infrastructure are highly favorable.

Wide roads, modern city planning, newer transport systems, and government-led digital infrastructure make Gulf cities ideal testing grounds compared with the regulatory fragmentation often seen in Europe and North America.

This expansion trend also reflects China’s growing lead in autonomous driving commercialization. While Waymo continues expanding in the United States and testing in London and Japan, Chinese firms are increasingly building international scale through the Middle East and Europe.

The larger insight is that the global robotaxi race is becoming geographically bifurcated. U.S. companies dominate North America, while Chinese firms are rapidly locking in early-mover advantage across the Gulf, parts of Europe, and select Asian markets.

In that context, Didi’s UAE test is more than an isolated pilot. It is another sign that the Middle East is fast becoming the first major overseas battleground in the global commercialization race for autonomous mobility.