WASHINGTON – President-elect Donald Trump’s decision on a treasury secretary is about far more than whose name will be printed on America’s money.
The choice of how to fill his highest-profile outstanding Cabinet selection will be the clearest indication yet of how he intends to wield import tariffs in his new administration.
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The leading candidates for the role have expressed differing perspectives on how Trump should use the protectionist trade policies that he put front and center in his campaign for the White House, while Trump himself has offered seemingly contradictory views.
Billionaire investor Scott Bessent, considered a leading candidate, has talked up tariffs as a negotiating ploy. Another prominent contender, Cantor Fitzgerald CEO Howard Lutnick, has expressed more support for broad tariffs. Lutnick is co-chair of Trump’s transition operation and is helping put forward candidates for key roles, including the Treasury Department.
Trump is also looking at other potential candidates as he decides who can best implement his economic agenda — and how big a role tariffs will play.
The president-elect, during this year’s campaign, portrayed the taxes on imports as both a negotiating tool to hammer out better trade terms and as a way to generate revenue to fund tax cuts elsewhere.
The Republican has proposed universal tariffs of as much as 20% and taxing Chinese imports at 60% or more, yet his campaign never filled in key details about how tariffs would be imposed and whether the goal was more about funding the government or pressing trade partners.
The two are competing priorities — achieving sustainable long term revenues from tariffs isn't possible if they're a negotiating tool, and sustaining them for the long term could constrain the growth Trump has promised to bring to the country.
The lack of clarity has spilled over to Trump's choice of treasury secretary, as tariffs run the risk of worsening inflation and also disrupting the stock market gains since the election that have been a point of pride for the president-elect.
Bessent told Bloomberg News in August that he views tariffs as a “one time price adjustment” and “not inflationary,” and that tariffs imposed during a second Trump administration would be directed primarily at China.
In a Fox News op-ed last week, Bessent said that tariffs are “a useful tool for achieving the president’s foreign policy objectives. Whether it is getting allies to spend more on their own defense, opening foreign markets to U.S. exports, securing cooperation on ending illegal immigration and interdicting fentanyl trafficking, or deterring military aggression, tariffs can play a central role.”
An advocate for imposing wide-ranging tariffs, Lutnick told CNBC in September that “tariffs are an amazing tool for the president to use — we need to protect the American worker.”
On Saturday, Elon Musk, who has been an influential voice at Trump's side during the transition, came out in favor of Lutnick on his social media site X.
“My view fwiw is that Bessent is a business-as-usual choice, whereas @howardlutnick will actually enact change,” Musk posted. “Business-as-usual is driving America bankrupt, so we need change.”
Higher tariffs also carry serious risks for the incoming Trump presidency, despite Trump's promises to the public that they will lead to more factory jobs and stronger growth.
The import taxes could upset trade partners and start a trade war. They could anger investors and cause stocks to slide. They could alienate voters who backed Trump because of frustration over higher prices only to find that their coffee, T-shirts, cars and other goods all cost more.
In August, the economists Mary Lovely and Kimberly Claussing found that a 60% tariff on China and separate 20% universal tariff would cost a typical U.S. household $2,600 annually.
Corporate America is keeping an anxious watch on Trump’s transition operation at his Mar-a-Lago resort in Florida and trying to figure out how to respond in the meantime.
To be sure, picking one or the other doesn’t mean Trump won’t take a different path once in the White House, as was seen in his first term.
That has left companies telling investors that they’re planning on a wide range of scenarios, with many focused on reducing their reliance on China.
When asked what policies Trump would require his treasury secretary to implement on day one, his transition team said it was focused on personnel choices.
“President-elect Trump is making decisions on who will serve in his second administration," said Karoline Leavitt, the transition spokeswoman and incoming White House press secretary. "Those decisions will continue to be announced by him when they are made.”
Major companies going into this month's election were accepting of a degree of uncertainty on tariffs, saying that they were making plans for a range of outcomes.
Donald Allan, Jr., CEO of the tool-maker Stanley Black & Decker, said on an Oct. 29 earnings call that his company has been planning for the possibility of higher tariffs since the spring. He stressed there are still a lot of unknowns, but his company was unlikely to move more manufacturing jobs into the United States because “it's just not cost effective to do.”
“What we don’t know is which scenario is going to play out and exactly how that would be. Is it going be just China? Is it going to be every country?” Allan said. “Those are all things that are to be determined."
Timothy Boyle, Chairman and CEO of Columbia Sportswear, said on his Oct. 30 earnings call that his company was “very concerned” about tariffs despite having a minimal exposure to Chinese imports.
“We believe the arguments about tariffs improving the domestic production of items such as footwear and apparels are fallacious” Boyle said.
The furnishings and home goods store Williams Sonoma said about half of its imports came from China in 2018 when Trump was last president, a number that has since fallen to 25% and could drop further if tariffs are expanded.
But Constellation Brands, a producer and marketer of alcoholic beverages, noted that its business was up double digits four years in row when Trump was last in the White House. CEO William Newlands played down the risk that Trump would hit Mexico with tariffs, even though Trump has talked about new tariffs on Mexican factories and the country is preparing for that possibility.
Constellation is betting that Trump will mainly aim at China.
“The general belief is that if there was going to be a situation related to tariffs, it’s highly likely that Mexico is not the main target — it’s China,” Newlands said.
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Associated Press writers Zeke Miller in West Palm Beach, Florida, and Michelle L. Price in New York contributed to this report.