Trump’s tariff message: I’m in charge of the economic agenda
Subscribe to enjoy similar stories. When President-elect Donald Trump said he would nominate the hedge-fund manager Scott Bessent as his Treasury secretary Friday, much of Wall Street and corporate America breathed a sigh of relief. The choice of Bessent, who is hawkish on deficits, a defender of the dollar’s reserve status, and until recently circumspect about tariffs, suggested that Trump would put a priority on market-friendly measures to boost economic growth and hold down inflation and interest rates.
The relief lasted just 72 hours. Trump’s announcement late Monday that he would slap tariffs of 25% on Canada and Mexico on his first day in office and an additional 10% on China until illegal immigrants and fentanyl stop entering the U.S. dispelled any doubt that he would govern as he campaigned—as a disruptive populist.
The lesson is that the most important member of Trump’s economic team is Trump himself. “In his first term, there was a lot of bluster that ended up getting walked back," Andy Laperriere, policy analyst at Piper Sandler, said in a note to clients Tuesday. “We expect plenty of bluster but more follow through in a second term because most of his staff is generally not going to try to talk him out of things like this." Whether Trump will actually raise tariffs or is simply negotiating remains uncertain.
Investors seem to think the latter: The fall in the Canadian dollar, Mexican peso and shares of exposed companies was relatively muted. While Trump clearly controls his agenda, the choices of Bessent and other establishment figures still matter. Supporters of Bessent think his presence will result in a more calibrated and growth-friendly policy mix than otherwise.
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