A deeper have a look at Trump’s tariff group | USAEMALL.com

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Tariff policy: the key players

Judging by the volume of chatter and research reports, Donald Trump’s policy that markets care the most about is tariffs. This makes sense: it could have a direct impact on equities (through prices) and bonds (through currencies). And tariff policy is susceptible, in theory, to the numerical — or pseudo-numerical — analysis Wall Street runs on.

But because the president-elect has said so much about tariffs, not all of it consistent, investors are left to speculate what the policy will be. In hopes of alleviating some of this uncertainty, we summarise below the public statements of Trump’s key economic appointees on the topic. We leave it to readers to decide which advisers, if any, will have the president’s ear, and which proposals will become policy.

Scott Bessent: In interviews, opinion pieces, and in a Senate hearing yesterday, Trump’s pick for Treasury secretary lamented that “free” trade has undermined US competitiveness and created an unbalanced global economy. This is because of “deliberate policy choices of foreign governments”.

• Bessent is not a tariff purist, in the style of Robert Lighthizer, Trump’s former US trade adviser. Lighthizer thinks high, permanent tariffs are required to restore US competitiveness. Bessent sees them as a negotiating tool.

• Bessent is a tariff gradualist. He has suggested levies should be rolled out on a schedule, and to varying degrees of severity, based on how unfair each country’s trade practices are. Tariffs should be “well telegraphed in the form of forward guidance to provide negotiating leverage and time for markets to adjust”.

• He is open to putting tariffs on allies and enemies alike. He has named US ally Germany and nominal friend Vietnam as possible targets, for failing to support consumption.

• He was particularly critical of Beijing’s trade practices during his confirmation hearing. But it is unclear if he thinks duties on China would be a negotiating tactic, or part of a geoeconomic containment strategy.

Howard Lutnick: Lutnick, Trump’s pick for commerce, is pro-tariff in a similar vein to Bessent.

• Like Bessent, Lutnick is not a purist. He has said tariffs are “obviously a bargaining chip”, to be used on enemies and allies to get them to alter trade policies.

• He is also not a tariff universalist. He has talked about tariffs based on individual products. This echoes, in part, the Reciprocal Trade Act, a policy Republicans touted during Trump’s first term, which would match other countries’ tariffs on US products with reciprocal tariffs on their own, product by product. But he has said we should put “tariffs on stuff we do make, and not put tariff stuff we don’t”, a distinction the RTA does not make.

• He does not seem to have expressed a view on whether tariffs would be enacted all at once, or gradually.

• He is rather obsessed with tariffs on cars.

• He says China is a “whole other kettle of fish” — which we assume means tariffs on that country will be designed to force change in Chinese behaviour, not to bring it to the negotiating table.

Stephen Miran: Miran, tapped to lead the Council of Economic Advisers, argues the dollar’s role as the world’s reserve currency is the cause of our global economic imbalances. Normally, the currency of a country that runs a big trade deficit would weaken, making its exports more competitive. But with global demand for the dollar as a reserve, this can’t happen. So the US manufacturing base is being hollowed out and US debts are ballooning. To counter this, he believes:

• Tariffs should be used to raise revenue — revenue that is in effect the fee other countries must pay in return for using the US currency as a reserve.

• Tariffs’ inflationary impact will be largely offset by the appreciation of the dollar, which keeps US import prices stable and diminishes the purchasing power of consumers outside of the US, meaning they in effect pay for the tariff. But the stronger dollar, again, makes US exports less competitive.

• To counter this, he proposes multilateral action (a new Plaza Accords) or unilateral action (such as “user fees” on purchases of US Treasuries by foreigners, or threats to remove the US security umbrella) to induce other countries to sell dollars, in turn strengthening their own currencies. His policy proposal is therefore “dollar-positive before it becomes dollar negative”.

• Like Bessent, he is a gradualist and non-universalist. Tariffs should be imposed gradually, and countries that co-operate with US demands should receive reprieves. He is explicitly against uniform tariffs imposed at high rates on day one. But, unlike Bessent, he does not prioritise preserving the US’s role as the reserve asset.

Jamieson Greer: Trump picked Greer, Robert Lighthizer’s former deputy, as US trade representative. Greer’s paper trail is much shorter than the others on this list. That said:

• To the extent Greer is an acolyte of Lighthizer, he may be a tariff purist. But Lighthizer is not in this administration and Greer is, so he may have compromised in ways Lighthizer would not.

• He is particularly focused on China, and was part of the team that enacted the first round of tariffs in 2018. In a testimony before a House special committee, he criticised Beijing’s trade practices, and raised alarm about their impacts on the US manufacturing sector. We assume this means he is a Chinese tariff maximalist and is not interested in negotiating with Beijing’s leadership.

• He is, or at least was, more open to policy support for domestic industries, something that the others on this list have been much more reticent about, or have said is less effective than tariffs.

Peter Navarro: Trump named Navarro, his USTR from his first term, as senior counsellor for trade and manufacturing. Navarro wrote the trade section of Project 2025, the conservative policy playbook written by the Heritage Foundation for the next administration.

• Like Bessent and Lutnick, Navarro’s approach is all about negotiation. He supports using reciprocal tariffs as a tactic.

• He does have a purist streak, though. He acknowledges tariff barriers may be very high if other countries do not negotiate in good faith, and this “result [would] speak to the fact that so many of America’s trading partners are applying significantly higher tariffs to thousands of American products”. If that leads to higher prices for Americans, so be it.

• It is unclear if Navarro is a gradualist. In Project 2025, he lays out a plan to negotiate with countries in order of the severity of their offences, but does not specify whether tariffs would be enacted in that order, or go up all at once and be negotiated later.

• He is a China maximalist. He says the Trump administration will work to decouple from China, and that negotiations would be “fruitless” and “dangerous”.

Kevin Hassett. Kevin Hasset, soon to be director of the National Economic Council, is, like Navarro, a staunch supporter of the RTA.

• He has been more clear than Navarro that tariffs should go up all at once, on allies and enemies alike. But, as opposed to what he said to us back in September, he has since suggested there could be a total cap on how high tariffs would go (“maybe 10 per cent”).

• He has been very critical of Beijing in the past, but it is unclear if he is open to Chinese negotiations, or a China maximalist.

All love tariffs. All are interested in using them as leverage. Most are heavily critical of China. All of this fits with Trump’s comments. At the same time, though, they are mostly against blanket tariffs applied at the same level to all countries and all products at the same rate — which is what Trump, at times, sounds like he wants. The market seems to think the advisers, who generally endorse fiddly policies, will have an influence on Trump, who is more of a sledgehammer guy. We’ll see.

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