MW Trump's economic picks form a 'team of rivals.' What it means for tariffs and more.
By Robert Schroeder
President-elect Donald Trump has assembled what might be called a team of rivals on economic policy. But investors should look no further than Trump himself when it comes to a key part of his agenda: tariffs.
More on tariffs in a moment. First, to recap the picks: Hedge-fund manager Scott Bessent was tapped as Treasury secretary, getting the nod despite lobbying from Elon Musk for Cantor Fitzgerald CEO Howard Lutnick. Lutnick instead was chosen to run the Commerce Department, after what was reported to be a nasty fight over the Treasury post.
Market Extra: Trump's Bessent pick for Treasury boosts hopes for year-end stock-market rally
"The economic policy 'team of rivals' is almost literally the case personally and professionally: strong Bessent/Lutnick antipathy now is publicly reported," wrote Pangaea Policy founder Terry Haines in a recent note.
Trump has also tapped Jamieson Greer to be U.S. trade representative and Kevin Hassett to lead the National Economic Council, lining up key posts for negotiating trade and a planned extension of tax cuts.
Thinking on tariffs among the picks has varied, but one thing is abundantly clear. Trump is plowing ahead with proposing levies even as one key cabinet choice, Bessent, said as recently as October that Trump's proposed tariff increases were "maximalist" positions that could negotiated. He later made a stronger case for tariffs in a Fox News opinion piece.
"Scott Bessent, while seen as a relief to the markets, will likely have relatively little control over Trump's tariff plans," wrote Beacon Policy Advisors in a note on Wednesday. "Howard Lutnick will have more influence, but still, part of the reason he and Bessent were selected was because Trump felt they would not stand in his way in the event of a disagreement, which will mean on issues like tariffs, Trump will have the ultimate say."
Trump's selection of Bessent to serve as Treasury secretary triggered a sigh of relief across global financial markets on Monday, as MarketWatch reported. Stock-market bulls saw the pick as a green light for a potential year-end rally, even as skeptics question whether Bessent can rein in tariff and other policy proposals that could cause investor indigestion.
The choices of Greer and Hassett, meanwhile, sent a signal to investors that Trump isn't moderating his aggressive stance on tariffs.
Now read: Why Trump foes can't block day-one tariffs on China, Mexico and Canada
Greer, who served as chief of staff to Trump's first-term trade czar, "supports the tariff and protectionist trade policies espoused by Trump during his first term and on the campaign trail," wrote Henrietta Treyz of Veda Partners in a Wednesday note. Hassett, she noted, is an advocate of Trump's tariff and trade strategy.
Asked to comment on Trump's economic picks, Trump-Vance transition spokeswoman Karoline Leavitt 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 - and his cabinet picks reflect his priority to put America first."
Beyond trade and macroeconomic policy, Trump's pick for labor secretary, Rep. Lori Chavez-DeRemer, was applauded by major unions like the AFL-CIO.
But while that organization's president noted Chavez-DeRemer's "pro-labor record in Congress," the union had a wait-and-see attitude on what she'll accomplish under Trump.
Washington Watch: Trump's labor-secretary pick backs unions, but here's why they aren't celebrating just yet
During his first term, Trump made moves that frustrated union organizers, as MarketWatch has reported. That included issuing a regulation for determining whether a worker is an employee or an independent contractor that was widely viewed as favorable to gig-economy companies like Uber $(UBER)$.
Heading into the Thanksgiving holiday, U.S. stocks DJIA SPX COMP were under pressure after the government reported the 12-month rate of inflation edged up to 2.3% from 2.1%, leaving it shy of the Federal Reserve's 2% goal.
In announcing his pick of Hassett, Trump said his former White House aide would help American families recover from inflation.
Victor Reklaitis and William Watts contributed
-Robert Schroeder
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November 30, 2024 10:19 ET (15:19 GMT)
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