The shift in power dynamics within the White House has brought the US back from the brink of an all-out global trade war. The role of Treasury Secretary Scott Bessent has become a crucial factor in navigating this complex landscape.
The Shifting Tides of Tariffs: How Trump’s Team Kept the World Guessing
In the chaotic minutes following US President Donald Trump‘s administration’s abrupt reversal course and pause on dozens of sweeping ‘reciprocal’ tariffs, one man quickly became the public face of the decision: Treasury Secretary Scott Bessent. The bespectacled 62-year-old former hedge fund manager told reporters gathered around him that it took great courage to stay the course until this moment.
The Role of the Good Cop and the Bad Cop
Some trade policy veterans have suggested that Bessent‘s centre-stage role in the tariffs announcement starkly highlights how shifting power dynamics within the White House brought the US back from the brink of an all-out global trade war. Bessent is playing the good cop, while Commerce Secretary Howard Lutnick and trade adviser Pete Navarro are playing the bad cop.
Scott Bessent is a British investment manager and former partner at Soros Fund Management.
He worked alongside George Soros from 1990 to 2003, playing a key role in the firm's hedge fund operations.
Bessent has also served as Chief Investment Officer for New York-based private equity firm, Saba Capital Management.
With over three decades of experience in investment management, Scott Bessent is known for his expertise in global macro and event-driven strategies.
The Chain of Events Leading to the Tariffs Announcement
While the White House has been largely quiet on the chain of events that led to Trump‘s market-shaking decision to pause reciprocal tariffs for most countries while raising levies on China, reports suggest it was Bessent who played a key part in swaying Trump. According to US media reports, it was Bessent who had conversations with business leaders on Air Force One the weekend beforehand and in the Oval Office on the morning of the decision.
The Shift in Power Dynamics
Earlier in his career, Bessent expressed reservations about tariffs. His views, combined with long experience in the bond market, ultimately made it possible for him to gain the president’s ear over Navarro and Lutnick, both of whom represented a harder-line stance on the tariffs.
The Approach of Treasury Secretary Scott Bessent
Mr Reinsch, who was also undersecretary of commerce for export administration in the 1990s during President Bill Clinton‘s administration, said that Bessent‘s approach has been ‘a classic way to deal with Trump‘. He added that Bessent tells the president there’s a better way forward to achieve his objectives, rather than simply telling him he’s wrong or made a mistake.
The Pecking Order Change
The absence of two key players in tariffs policy, US Trade Representative Jamieson Greer and Peter Navarro, from the Oval Office meeting on 9 April prompted speculation about their stance having fallen out of favour with the president. One source close to the White House told Reuters news agency there had been a ‘pecking order change’.
The Impact on Market Volatility
The various figures involved in tariffs gave contradictory statements on the policy, which experts say contributed to confusion and market volatility. Mark Sobel, who spent nearly 40 years at the Treasury Department, including as deputy assistant secretary for international monetary and financial policy, said that ‘they are not singing on the same page’. He added that this lack of discipline has resulted in whiplash among markets.
A tariff is a tax imposed on imported or exported goods.
It's a trade policy tool used by governments to regulate international trade, protect domestic industries, and generate revenue.
Tariffs can be fixed or variable, depending on the type of goods and countries involved.
According to the World Trade Organization (WTO), tariffs have increased globally since 2016, with an average tariff rate of around 3%.
The US-China trade war has seen significant increases in tariffs, impacting global supply chains and economies.
The Future of Tariffs Policy
Several experts contacted by the BBC expect Bessent to now take a much more prominent public role in tariff policy, with Lutnick taking charge of the negotiations. Haines, for example, said he believes Bessent will become, in real terms, ‘the spokesman for economic policy’. Ultimately, a more structured approach could contribute to market stability.
As an economist at the conservative Heritage Foundation, Andrew Hale said that markets want winners and losers, like People magazine-style stuff. However, businesses and investors want certainty. Haines cautioned against assuming that any one person contributed the most to Trump‘s decision.
The shift in power dynamics within the White House has brought the US back from the brink of an all-out global trade war. The role of Treasury Secretary Scott Bessent has become a crucial factor in navigating this complex landscape.
