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President-elect Donald Trump is praising the members of his new economic team for their business savvy and Wall Street credentials. But some of his key players have questioned the viability of his top priorities as recently as this year. Hedge fund manager Scott Bessent, his pick for Treasury, told his investors early in 2024 that tariffs would be inflationary and “would strengthen the dollar — hardly a good starting point for a US industrial renaissance.” Howard Lutnick, his choice to head the Commerce Department, has described Trump’s threatened import taxes as merely a “bargaining chip.” And Kevin Hassett, who will lead Trump’s National Economic Council, has cautioned that “Congress would need to be involved” in imposing universal tariffs. Hassett has also said he doubts that a further reduction in corporate taxes would “achieve comparable dynamic effects” in raising revenue as Trump’s 2017 tax law and has emphasized the need for an independent Federal Reserve.
While these contenders have broadly backed Trump’s proposed policies in the past and campaigned hard for him during the election, their past demonstrations of dissent suggest that there could be conflict in the administration as the president pursues his sweeping plans to reshape global trade and the U.S. economy. Trump has already tapped Jamieson Greer, a protege of his longtime trade adviser and avowed China hawk Robert Lighthizer, to be his U.S. Trade Representative. And he still needs to announce appointments to other top roles, including chair of the Council of Economic Advisers. The dynamic could be similar to his first administration, when protectionist factions led by Lighthizer and Peter Navarro clashed with advisers like Gary Cohn, Larry Kudlow or Hassett, who came from more traditional Wall Street or GOP backgrounds.
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Health and wellness care can be expensive even with insurance. But healthcare expenses don’t need to be budget busting. Financial options, such as CareCredit, help people pay for health and wellness care over time. They also provide flexibility, with utility across a range of products and treatments including hearing aids, cosmetic procedures, Lasik eye surgery and even veterinary care for pets. To learn more, visit CareCredit’s WellU website: https://www.carecredit.com/well-u/ | | | “There’s always going to be differences among senior officials in any government, and during the first administration there were robust debates about tariff levels and how to implement them,” said Everett Eissenstat, a partner at Squire Patton Boggs who served as Trump’s deputy assistant for international economic affairs in his first term. “I would expect there to be debates in this administration as well.” In a statement, Trump-Vance transition spokesperson Steven Cheung said the president-elect’s “nominees have been strong and vocal proponents of his America First policies, including on tariffs, supporting them regularly during the campaign, and would fully implement those policies in the next Administration. All are aligned with the President’s vision of using tariffs to protect strategically important industries, raise revenue and negotiate with trading partners.”
What’s different this time around is the scope and severity of the policies Trump has identified as major goals on both the campaign trail and during the transition. In addition to the universal tariffs that he has said will generate “trillions” in revenue, he has threatened additional levies on Canada and Mexico over border security concerns. Over the weekend he pledged to impose 100 percent tariffs on Russia, Brazil and other major developing countries if they don’t commit to the use of the U.S. dollar as their reserve currency. He has also vowed to deport millions of undocumented immigrants in the U.S.,
a move that economists say could stoke inflation by shrinking the nation’s workforce. Industry groups, investors and economists have been heartened by Trump’s selection of Bessent and Hassett, in particular, as a sign that his Cabinet might be able to moderate the parts of his agenda that might disrupt markets or drag on growth. His most recent tariff threats underscore how quickly he could move on more aggressive elements of his agenda.
Any supposed moderates “may curb him at the margins but, ultimately, he’s a strong-headed boss,” said Mark Sobel, a former Treasury official who is now the U.S. chair at the Official Monetary and Financial Institutions Forum. “He’s going to do what he wants to do.” IT’S TUESDAY — Are you going to be at the DealBook conference in New York on Wednesday? Want to grab coffee? Let Sam know at ssutton@politico.com and @samjsutton. And for economic policy or Fed news, contact Victoria at vguida@politico.com
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The October Job Openings and Labor Turnover Survey (JOLTS) will be released at 10 a.m. … The Brookings Institution and American Enterprise Institute will co-host a conference on fiscal responsibility that starts at 2:30 p.m. Council of Economic Advisers Chair Jared Bernstein and former CEA Chair Cecilia Rouse are scheduled to speak … SEC Chair Gary Gensler will participate in a fireside chat at the 2024 Healthy Markets Association Conference at 3:30 p.m. … Chicago Fed President Austan Goolsbee will speak at the Midwest Agriculture Conference at 3:45 p.m. … Fed’s Waller leaning toward December cut — Board member Christopher Waller, an influential member of the Fed’s rate-setting committee, on Monday said he’s leaning toward cutting rates again in December but also made clear that he’s wary about the possibility that progress on inflation “may be stalling at a level meaningfully above 2 percent.”
“Let me emphasize that this is a risk but not a certainty,” he said in prepared remarks about the possibility that inflation may be getting stuck. “I take the recent inflation data seriously, but we saw a similar uptick in inflation a year ago that was followed by a continued decline, so I also don’t want to overreact.” — New York Fed President John Williams in separate remarks also flagged bumps in the road on inflation but said there are “reasons to be confident” it will get back down to 2 percent. He also defended the central bank’s moves to cut rates, saying “while growth in demand has been strong, growth in supply has been even stronger.” Another good day in markets — Stocks again hit record highs on Monday as investors parsed new data, including a report from the Institute for Supply Management that showed U.S. manufacturing is still struggling but nevertheless beat expectations, WSJ reports. New export restrictions — The Biden administration is clamping down more on advanced technology that can be sent to China, NYT reports, in an effort to prevent the country from developing its own advanced chips for military equipment and artificial intelligence. French government faces collapse — The French government is poised to collapse later this week after parties on both ends of the political spectrum submitted no-confidence motions on Monday against Prime Minister Michel Barnier, Reuters reports.
| | | | A message from CareCredit:   | | | | | Groundhog Day — With the government slated to shut down in less than three weeks without a spending deal, congressional leaders have begun serious negotiations toward a funding patch that punts the deadline into Trump’s second term, our Jennifer Scholtes and Katherine Tully-McManus report. Say hello to the AI bill — House Financial Services Chair Patrick McHenry and ranking member Maxine Waters introduced a pair of bills on Monday that could serve as guideposts for the next Congress on boosting scrutiny of the use of artificial intelligence in financial services, our Eleanor Mueller reports.
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CFPB rule incoming — The Consumer Financial Protection Bureau is proposing a rule to crack down on data brokers that sell personal and financial information, our Katy O’Donnell reports. Intel CEO out — Intel Corp. CEO Pat Gelsinger was given the option to resign or be removed by the chipmaker’s board and decided to depart, adding to the turmoil at one of the pioneers of the technology industry, Bloomberg reports. Russia’s economic woes — The Russian economy is struggling as the war with Ukraine enters its fourth year, stoking criticism of the country’s central bank, NYT reports.
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