Donald Trump has finally decided on the most important of his pending appointments, that of Secretary of the Treasury. Disputes among his supporters over which was the most appropriate candidate have delayed the appointment. Trump has finally opted for Scott Bessent, as announced. Beyond the fact that his name will appear on future bills, the Treasury secretary is the key figure to execute the tax cuts that Trump has promised. It can also play a decisive role in applying the protectionist tariff policy advocated by the president-elect and which could spark a trade war.
A couple of names had been rumored from the beginning as candidates for the position. Billionaire investor Scott Bessent, 62, founder of the firm Key Square Group, and Howard Lutnick, CEO of Cantor Fitzgerald.
Lutnick, who was Elon Musk’s favorite for the job, is co-chairman of Trump’s transition operation and has been helping to propose candidates for key positions, including the Treasury Department. However, with what was left out of the fight for the main position in the economic area. The president-elect has also been studying other possible options, but has finally decided on Bessent.
“I am pleased to appoint Scott Bessent as the 79th Secretary of the United States Treasury. Scott is widely respected as one of the world’s leading international investors and geopolitical and economic strategists. Scott’s story is that of the American dream,” he wrote on his social network, Truth.
“Scott has long been a strong supporter of the America First agenda. On the eve of our great country’s 250th anniversary, you will help me usher in a new Golden Age for America, as we strengthen our position as the world’s leading economy, a center of innovation and entrepreneurship, a destination for capital, always maintaining, and without a doubt, the US dollar as the world’s reserve currency. “Unlike previous Administrations, we will ensure that no American is left behind in the next, greatest economic boom, and Scott will lead that effort for me and the great people of the United States of America,” Trump said.
The Republican has reached the White House with He promised to extend indefinitely the 2017 tax cuts that expire at the end of 2025, which especially benefit the highest incomes and include lower tax rates, a larger standard deduction, a larger child tax credit and a greater exemption from the estate tax.
In addition, he has made promises aimed at attracting groups of voters, all of which must pass through Congress. He wants to exempt restaurant and hospitality workers’ tips, overtime, and Social Security benefits from taxes, as well as make auto loan interest tax deductible and fully restore the deductibility of state and local taxes. It will also eliminate taxation that currently extends to Americans living abroad. For companies, it proposes lowering the corporate tax rate from 21% to 15% for
On trade policy, Trump intends to impose reciprocal tariffs on U.S. imports equal to the rates that trading partners impose on U.S. exports (usually higher). To that would be added (or overlapped) a universal basic tariff of 10% to 20% on all imports. For China, Trump has promised a 60% tariff on all imports. Besides,
During the election campaign, Trump presented import tariffs as a negotiating tool to improve trade conditions and also as a way to generate revenue to finance tax cuts elsewhere. Economists have warned of the inflationary effects that an increase in tariffs could have and also the possibility of retaliation from trading partners.
Yellen’s successor
The new Treasury Secretary will succeed Janet Yellen, who has held the position in all four years of Joe Biden’s term. The methodical and farsighted former chair of the Federal Reserve became the first woman to hold the position.
During Trump’s first term, the position of Treasury secretary was one that remained relatively untouched by the president’s frequent mood swings. Steven Mnuchin held the position from beginning to end of his presidency.
The Treasury Department has broad fiscal and financial policy functions. It is responsible for collecting taxes and settling federal payments; it is the issuer of currency, but also of federal public debt securities. He represents the United States in numerous international organizations, such as the International Monetary Fund, the World Bank and the Inter-American Development Bank, among others.
The Treasury advises the president on economic policy, although in practice key fiscal policy decisions are made in Congress and monetary policy decisions are made in the Federal Reserve. The Department, however, may be key to guiding Trump’s tariff policy and also to defining the regulations to be applied in the financial sector.
The new Secretary of the Treasury inherits a thriving economy, with unemployment near minimums and inflation relatively controlled, which is growing at a good pace and generating employment. However, in what is its most direct responsibility, the public accounts, the situation is more delicate: the public deficit has been skyrocketing for years and the public debt is growing without stopping. The president of the Federal Reserve, Jerome Powell, has expressly warned that this path is unsustainable.
