Trump's pick for US Treasury secretary is Scott Bessent, hedge fund manager
South China Morning Post
5 min read
US president-elect Donald Trump has nominated Scott Bessent, a hedge fund manager, to be the country's next Treasury secretary, a key player in carrying out what is expected to be a tough economic agenda against China.
"I am most pleased to nominate Scott Bessent to serve as the 79th Secretary of the Treasury of the United States," Trump said in a statement released on Truth Social. "Scott is widely respected as one of the world's foremost international investors and geopolitical and economic strategists.
"On the eve of our Great Country's 250th Anniversary, he will help me usher in a new Golden Age for the United States, as we fortify our position as the World's leading Economy," he said.
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While most incoming administrations customarily do not announce their cabinet nominees until later in the 10-week transition period, Trump has been naming his at a much faster pace, with a string of selections for other leading positions in the two weeks since he won the election.
Those have included Senator Marco Rubio for secretary of state and Fox News commentator Peter Hegseth for defence secretary, both pronounced China hawks.
Indeed, the pick for Treasury was a relatively late naming. Trump nominated Howard Lutnick, the long-time chief executive of the Cantor Fitzgerald investment back for commerce secretary on Tuesday.
Lutnick, who is also running Trump's transition team, has referred to the early 1900s as a prosperous period for the US, when "there was no income tax and only tariffs".
Trump reportedly took a longer time to decide on the treasury secretary because he was seeking a candidate who would be loyal to him and his pro-tariff agenda, as well as be welcomed by Wall Street.
Analysts say this reflects in part Trump's focus on the economy -along with immigration - which helped secure his win as well as the portfolio's link to US stock market that he sees as a barometer of his success.
Howard Lutnick, chairman and chief executive of Cantor Fitzgerald, shown speaking during a Trump rally at Madison Square Garden on October 27, has been nominated as US commerce secretary. Photo: Reuters alt=Howard Lutnick, chairman and chief executive of Cantor Fitzgerald, shown speaking during a Trump rally at Madison Square Garden on October 27, has been nominated as US commerce secretary. Photo: Reuters>
Among the US-China levers that the Treasury secretary can influence include claims of currency manipulation; efforts to supplant the US dollar with the digital yuan and related financial vehicles and the many financial sanctions that Washington has increasingly relied on.
Trump has advocated using tariff revenues to replace income taxes. Bessent, 62, and Lutnick would be expected to work closely to enact Trump's trade and tariff policy, which has caused concern among many US trading partners.
Additionally, Trump has made reshoring of manufacturing and jobs back to the US a priority in his second term, as well as extending the corporate tax cuts he secured in his first term but which were scheduled to expire next year.
Trump has also vowed to pursue a hardline trade policy against China, the target of a trade war he started in his first term.
His new proposals include at least 60 per cent tariffs to be applied to all imports from China, and tariffs of up to 200 per cent on Chinese electric vehicles, which he called a "scam" that would cause a "bloodbath" in the US auto industry.
The US Treasury is responsible for enforcing US tax laws, as well as sanctions and export controls targeting threats to American economic security - some of the most frequent trade tools the US wields against China.
More than 700 Chinese entities are blacklisted by the US because of national security concerns, human rights issues or their support to Russia's industrial base.
Under departing US President Joe Biden, Washington also tightened export controls on strategic goods and sensitive technologies to China.
Other potential treasury secretary candidates that US media have reported on included private equity executive Marc Rowan and Kevin Warsh, a former member of the Federal Reserve board of governors.
The three were reportedly among the finalists and met separately with Trump at his Mar-a-Lago resort in Florida on Wednesday.
Bessent, founder of investment firm Key Square Capital Management, supports Trump's tariff policy against China, saying it could be an effective bargaining tool and rejecting the warnings by many economists that the policy could be inflationary. He has urged US actions in standing up to China's "unfair" trade practices.
Chinese Vice-Premier Liu He with Trump at the signing ceremony for the "phase-one" trade agreement in Washington on January 15, 2020. Photo: Xinhua alt=Chinese Vice-Premier Liu He with Trump at the signing ceremony for the "phase-one" trade agreement in Washington on January 15, 2020. Photo: Xinhua>
Bessent established Key Square after serving as chief investment officer at George Soros's Soros Fund Management from 2011 to 2015.
Robert Lighthizer, the US trade representative in Trump's first term who negotiated with China over a trade deal, was also a top contender, according to reports.
In 2018 Trump began imposing tariffs on more than US$300 billion worth of imported Chinese goods and pushed Beijing to sign an agreement, known as the phase-one deal, requiring it to buy an additional US$200 billion of American goods and services in a two-year period.
After the deal was signed on January 15, 2020, Beijing fell well short of the target, in part because pandemic-related supply chain disruptions hampered exports.
There is a growing debate whether Trump could revive the agreement, which he said "the best deal" he has ever made.
Chinese President Xi Jinping, meeting with Biden on the sidelines of the Apec summit this month, called on the US to cooperate on trade and economy.
Many analysts regarded that as a signal of willingness to engage in trade talks with the US.
