The new U.S. Treasury Secretary's "open struggle and covert competition": Trump wants loyalty and tariffs, but also wants the U.S. stock market not to fall

The candidate for U.S. Treasury Secretary has returned to the initial starting point after a dramatic struggle.

Even though Trump is eager to confront the establishment, the list of cabinet candidates he proposed has angered the industry and even members of his own party. However, for this key position of Treasury Secretary, he seems unwilling to confront Wall Street directly, which explains why Bentsen ended up smiling in the end.

After all, the newly appointed Treasury Secretary must be sufficiently loyal to Trump, implement his tariff plans, and ensure that capital interests are not harmed.

As the chief bond salesman and the chief "gatekeeper" of the dollar in the U.S., Bentsen undoubtedly became the most suitable candidate for Treasury Secretary in the eyes of Wall Street. Although he stated that he would support Trump's tariff plans and work hard to promote tax cuts, he has not been overly rigid in adhering to any extreme positions in the past. This has led Wall Street to expect that he can prioritize macroeconomic stability and market stability rather than catering to political interests.

His cautious selection of the Treasury Secretary is far more careful than other cabinet appointments because he clearly understands that he cannot afford to make mistakes here. Since he strongly advocated populist economic policies during the campaign, including significantly raising tariffs, he needs to find a suitable Treasury Secretary who can also protect the indicators he values—U.S. stocks. He has consulted top Wall Street executives and paid attention to market reactions to different candidates.

Of course, this does not prevent other candidates from launching fierce attacks on this key position of Treasury Secretary, such as Howard Lutnick, making the entire process much more convoluted than other cabinet positions, beyond imagination. Lutnick's attacks on Bentsen even angered Trump, leading him to expand the candidate list, with the inclusion of Marc Rowan and Kevin Warsh directly opening up a "free-for-all."

The final outcome also reflects Trump's efforts to prove that he is the one making the decisions. For example, since Rowan and Warsh could not reach an agreement with him on the crucial tariff issue, they would not become the Chosen One.

Bentsen and Lutnick's "Intense Battle" Shocks Trump

As a Treasury Secretary candidate supported by Musk, Lutnick emerged as a strong competitor to Bentsen.

Last Saturday, Musk boldly stated on X that Bentsen's appointment as Treasury Secretary would mean "continuing to lead America toward bankruptcy," criticizing it as a traditional Wall Street approach, while Lutnick "would implement change."

Once the tweet was released, the odds of Bentsen obtaining the position significantly dropped on the prediction trading platform Polymarket.

The relationship between Bentsen and Lutnick continued to deteriorate to the point where Trump's advisors worried they might not be able to work together in the new administration. Even the "old-timers" in Trump's team, who had experienced various fierce struggles in Trump's first cabinet, were shocked by the public and private battles and mutual smear campaigns between the two. The Besant team revealed to Trump that Lutnick had invited Hillary Clinton to New York for a fundraising event in 2015, while Hillary was running for president, and the invitation stated that Lutnick was the sole host.

The Lutnick team often reminded Trump that Besant had worked under the notorious figure in conservative circles—Soros. They would also send some performance data from Besant's founded Key Square Capital to the Trump team, questioning Besant's business capabilities through selectively captured data.

They even suggested that Besant did not fully support Trump's tariff plan, citing Besant's comments in an October interview, where he stated that Trump's tariff threats could be influenced by negotiations, and the ultimate impact might be weakened.

However, this month Besant also countered, emphasizing his support for the tariff plan:

If used properly, tariffs can not only increase fiscal revenue but also encourage companies to resume production, reducing our dependence on the industrial production of strategic rivals.

In summary, the fierce struggle between the two sides revealed "part" of the mystery on Tuesday: Lutnick was nominated as Secretary of Commerce, and was "directly responsible" for the Office of the United States Trade Representative.

However, after Lutnick withdrew from the Treasury Secretary candidacy, everything seemed to become more confusing, as on that day, Warsh and Rosen unexpectedly joined the fray.

Rosen bluntly stated he "would not be obedient"

On the day the news was announced, Mark Rosen, co-founder of private equity giant Apollo Global Management, was attending a conference in Hong Kong but quickly shortened his trip, taking a private jet for an 18-hour flight to arrive at Trump's Mar-a-Lago on Wednesday afternoon.

Meanwhile, financial billionaires within Trump's circle began lobbying for Rosen, with some even directly texting Trump to express their support for him.

Rosen himself also expressed interest in the Treasury Secretary position, but he made it clear that while he felt honored to join Trump's team, he would not be obedient to Trump, which could potentially hinder policy implementation.

Moreover, insiders indicated that Trump believed Rosen's views on the tariff plan were not aligned with his. So under these circumstances, by Thursday, the spotlight shifted to the showdown between Warsh and Besant.

Warsh prefers the Federal Reserve

Kevin Warsh, as the "youngest governor" in the history of the Federal Reserve, emerged as a dark horse candidate.

He advocates for free trade, supports a strong dollar, and the independence of the Federal Reserve, and is seen as someone who could counterbalance some of Trump's radical economic plans. He has also clearly stated that he would prioritize becoming the Chairman of the Federal Reserve after Powell's term ends in May 2026 At that time, experts analyzed that investors would see the nomination of Waller as a sign of stability, and Trump has always valued market opinions, which increased Waller's chances.

Insiders said that the Lutnick team expressed support for Waller. Some suggested that Waller temporarily serve as Secretary of the Treasury for about a year, and then be nominated as Chairman of the Federal Reserve. However, the reality is that this plan is quite difficult to implement.

More importantly, just as Trump views Rosen, he also believes that Waller would find it hard to reach a consensus with him on the tariff increase proposal. Therefore, various factors combined have paved the way for Bessent to regain an advantage.

Bessent's Ambitious Plan

The candidate for Secretary of the Treasury has finally been settled, and Bessent's successful comeback is a result that satisfies Trump's team. Trump has previously stated that among all the candidates for Secretary of the Treasury, he trusts Bessent more and believes he can better implement the government's new policies.

After announcing the final candidate on Friday, Trump stated:

Bessent is respected by everyone and is one of the most important investors and geopolitical economic strategists in the world... He will help me lead America into a new golden age.

Bessent advocates reducing the budget deficit to 3% of GDP by 2028, achieving 3% GDP growth through deregulation, and increasing oil production by 3 million barrels per day or an equivalent amount of energy.

Considering Bessent's long-standing dissatisfaction with the Federal Reserve, as the highest economic official in the cabinet team, he may propose an unusual nomination method to select the next Federal Reserve Chairman. Bessent has previously stated that the next Federal Reserve Chairman could be appointed in advance, rather than waiting for Powell's term to end. This means that the appointed candidate would participate in Federal Reserve decision-making early, becoming the "shadow Federal Reserve Chairman," and this person could be Waller.

The fierce internal struggle over the Secretary of the Treasury candidate also reflects the situation after Trump's return to the White House. Trump's core circle consists of powerful billionaires and outspoken populists, each with their own agendas and very firm positions. The infighting among these individuals may lead to significant differences and conflicts in policy within this administration.