Donald Trump, the next president-elect, has put together a group of people who disagree with him on economic policy. When it comes to tariffs, however, buyers should only look to Trump.
Soon, I’ll talk more about taxes. To start, here are the picks again: Hedge fund manager Scott Bessent was chosen as Treasury secretary, even though Elon Musk pushed for Cantor Fitzgerald CEO Howard Lutnick to get the job. Lutnick was given the job of running the Commerce Department instead, after what was said to be a nasty fight over the Treasury job.
“The economic policy ‘team of rivals’ is almost literally the case personally and professionally: strong antipathy between Bessent and Lutnick is now public knowledge,” wrote Terry Haines, founder of Pangaea Policy, in a recent note.
Trump has also chosen Jamieson Greer to be U.S. trade representative and Kevin Hassett to lead the National Economic Council. These are important positions for making trade deals and a plan to keep tax cuts in place.
Different picks have had different ideas about taxes, but one thing is very clear. Trump is moving forward with his plans to raise tariffs even though Bessent, a key cabinet choice, said in October that Trump’s planned tariff increases were “maximalist” positions that could be negotiated. Then, in an opinion piece for Fox News, he made a better case for tariffs.
Even though Scott Bessent’s appointment was seen as good news by the markets, Beacon Policy Advisors said in a note on Wednesday that he probably won’t be able to change Trump’s tariff plans very much. “Howard Lutnick will have more power, but Trump chose him and Bessent in part because he thought they wouldn’t stand in his way if they didn’t agree with him. This means that Trump will have the final say on things like tariffs.”
As noted by MarketWatch, Trump’s choice of Bessent as Treasury secretary made financial markets around the world breathe a sigh of relief on Monday. Stock market bulls saw the pick as a sign that the market could go up at the end of the year, while skeptics wonder if Bessent can stop tariffs and other policy ideas that could make investors sick.
Greer and Hassett’s picks, on the other hand, told investors that Trump isn’t going to soften his stance on tariffs.
Greer was Trump’s trade czar during his first term and was his chief of staff. Henrietta Treyz of Veda Partners wrote in a Wednesday note that Greer “supports the tariff and protectionist trade policies espoused by Trump during his first term and on the campaign trail.” It was pointed out that Hassett supports Trump’s trade and tax plan.
Karoline Leavitt, a spokeswoman for the Trump-Vance transition, said in a statement, “The American people re-elected President Trump by a resounding margin, giving him a mandate to implement the promises he made on the campaign trail. His cabinet picks reflect his priority to put America first.”
Aside from trade and macroeconomic policy, big unions like the AFL-CIO praised Trump’s choice of Rep. Lori Chavez-DeRemer as labor secretary.
But even though the head of that group talked about Chavez-DeRemer’s “pro-labor record in Congress,” the union wasn’t sure what she would do under Trump.
MarketWatch says that during his first term, Trump did things that made union leaders angry. As part of that, they put out a rule for figuring out whether a worker is an employee or an independent freelancer. This rule was seen as good for companies in the gig economy, like Uber UBER 0.08%.
Before the Thanksgiving break, U.S. stocks DJIA -0.31% SPX -0.38% COMP -0.60% were under a lot of pressure after the government said that the 12-month rate of inflation rose from 2.1% to 2.3%, which is still below the Federal Reserve’s goal of 2%.
Trump said that Hassett, a former aide in the White House, would help American families get back on their feet after inflation when he announced his choice.
