President-elect Donald Trump's picks to guide economic policy in his incoming administration are a mix of sober-minded yet diverse loyalists who are eager to carry out his tax, spending, and tariff agenda.
Over the past few weeks, Trump has been announcing nominees for Cabinet and other high-up positions in his administration. Unlike some of his Cabinet choices who have drawn backlash for being unorthodox, his choices to carry out economic policy are experienced individuals who appear united in their willingness to carry out his vision for the country.
Trump has picked hedge fund manager Scott Bessent to lead the Treasury Department, businessman Howard Lutnick as commerce secretary, and Rep. Lori Chavez-DeRemer (R-OR) to be secretary of labor. He also picked Kevin Hassett to be director of the National Economic Council and Jamieson Greer to serve as U.S. trade representative.
The market has largely reacted positively to Trump's picks. While united in their support for the president-elect, the choices do have some ideological differences.
"I think the pattern in Trump's economic policy appointments is that he's looking for loyalty above all else," Brian Riedl, a budget expert at the conservative Manhattan Institute, told the Washington Examiner. "Ideology seems to be secondary because his advisers really run the gamut from traditional conservatives to populists and even economic liberals."
For instance, Hassett is from the traditional mold and would likely have been comfortable in any Republican administration of years past. Chavez-DeRemer, on the other hand, is somewhat of a pro-union populist. Lutnick and Greer, who will lead the trade agenda, appear quite in line with Trump's desire to impose (or at least threaten to impose) tariffs.
One major goal of the new administration is to extend, and perhaps expand, the expiring features of the 2017 Tax Cuts and Jobs Act. The slate of advisers will be critical in pushing for and implementing the expanded tax cuts, a job that will be made easier by Republican majorities in the House and Senate.
"That's going to have to be goal No. 1 for this whole group -- is to get Congress to use the reconciliation process to extend those tax cuts and also enact the particular proposals that the president made," former Rep. David McIntosh (R-IN), who is now the president of the conservative Club for Growth, told the Washington Examiner.
For example, Trump promised to exempt taxes on tips and eliminate taxes on Social Security while on the campaign trail.
Getting Republicans in the House and Senate to carry out some of his requests could end up being a bit more challenging than others. Trump has said he wants to further slash the corporate tax rate to 15% and lift the cap on state and local tax deductions -- policy changes that would add to the country's already high deficits and national debt, which just passed $36 trillion last week.
"What will be interesting is to see how they approach something like fiscal policy," Shai Akabas, executive director of economic policy at the Bipartisan Policy Center, told the Washington Examiner.
Akabas noted that some of Trump's economic picks have indicated that they prioritize fiscal restraint and responsibility. Akabas pointed out that Bessent has spoken about reducing deficits, which would be challenging with the coming tax negotiations.
"So how they square that circle and think about the broader fiscal picture in the context of some of the policies that they are planning to advance will be something we won't find out until the new administration takes office, but it's something to keep an eye on," he said.
McIntosh pointed out that Bessent and Hassett's picks indicate that Trump will follow through on his promise to open up "free market innovation" in the cryptocurrency space.
Trump has been a fierce advocate for crypto during this election cycle, something that has propelled bitcoin to new heights on expectation of a friendly administration. Bessent, himself an investor in the space, will play a key role in making that come to fruition.
"Crypto is about freedom, and the crypto economy is here to stay," Bessent told Fox Business this year. "Crypto is bringing in young people, people who have not participated in markets."
One of the biggest agenda items for Trump and his economic team during his final term will be on the trade front.
During Trump's first term, he successfully used Section 232 of the Trade Expansion Act of 1962, which gives the president broad power to levy tariffs if there is a threat to national security, to impose a 25% tariff on imported steel and a 10% tariff on aluminum.
Josh McCabe, the director of social policy at the Niskanen Center, noted that Trump has talked about tariffs this election cycle not only in terms of getting fairer trade deals but also to offset his tax agenda.
"He's made it much clearer this time that I think he wants tariffs to play some sort of role in raising revenue," McCabe told the Washington Examiner.
Trump has already announced some surprise tariffs. In a social media post last week, Trump said he would put tariffs against Mexico and Canada into effect on Jan. 20, 2025, the day he is sworn in. The 25% tariffs are designed to coerce the two countries into stopping the flow of narcotics and illegal immigrants into the United States.
In addition, Trump vowed additional 10% tariffs on China for its role in producing some of the ingredients used to produce the fentanyl that makes its way to users in the U.S.
Trump's most aggressive idea is to levy 10% to 20% across-the-board tariffs, although he has also pushed for a legal change that would give him the power to unilaterally impose tariffs of equal size placed by other countries in the U.S. That would need congressional approval.
Tad DeHaven, a policy analyst at the libertarian Cato Institute, which generally opposes tariffs, said that the tariffs could be more of a threat and a way to compel countries to acquiesce.
"But you know, at the same time, that's not good for business investment," he told the Washington Examiner. "It creates a lot of uncertainty. And if your goal is to grow the economy, you want to be looking at lowering barriers, not increasing barriers."
Perhaps Trump's most surprising choice among his economic picks was Chavez-DeRemer. She could steer the administration to being more labor-friendly this time around.
"I guess a big difference from the first one is probably the Labor Department secretary," McIntosh said about the choice compared to Trump's first term.
While in Congress, Chavez-DeRemer supported the Protecting the Right to Organize Act, legislation that the overwhelming majority of Republicans strongly oppose.
The PRO Act would enact sweeping changes to the employment landscape, including adjusting what kinds of workers can be classified as independent contractors. It would essentially end right-to-work laws, which have been enacted in 27 states to prevent unions from requiring that employees pay dues or fees. Employees who benefit from a collective bargaining agreement can be compelled to contribute to the union, according to the PRO Act.
Grover Norquist, founder of the powerful low-tax advocacy group Americans for Tax Reform, told the Washington Examiner last week that Trump's choice is "a little inexplicable."
Douglas Holtz-Eakin, the director of the center-right think tank American Action Forum, said that Chavez-DeRemer's support for the PRO Act is a lightning rod for conservatives and that she will likely be the economic pick with the toughest path through the Senate.
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Taken together, Holtz-Eakin, who is also the former director of the congressional Budget Office, said that the slate of economic picks is basically a microcosm of Trump's orbit.
"The candidate, now the president-elect, gets to take policy positions, and the Cabinet executes on them," Holtz-Eakin said. "So he's got people who have loyally pledged to act on those from the beginning."