Inside the battle to be Trump’s Treasury secretary

Good morning and welcome to White House Watch! Today let’s talk about:

• The dramatic Treasury secretary fight

• Business leaders’ warning on Trump’s deportation plans

• Beijing’s race to find Trump’s China whisperer

The battle for Treasury secretary is getting more cut-throat. 

What started as a bitter showdown between billionaires Howard Lutnick and Scott Bessent to prove their commitment to Trump’s tariff plans has turned into a full-blown “pissing match”, as one person described [free to read]. 

Some Wall Street figures are trying to thwart Lutnick’s bid, setting up a clash with Elon Musk, who wants to see the Cantor Fitzgerald executive in the role. Several executives who backed Trump’s presidential run accused Lutnick of using his position as Trump’s transition co-chief to push himself for the job. 

A Trump supporter on Wall Street called Lutnick a “swashbuckler” who was vital to the campaign but is ill-suited for the most important job in the US economy.

Bessent, a hedge fund manager who used to manage money for George Soros, is seen as a more traditional Treasury pick. Top financiers backing his bid said he had the experience and credibility to deliver key portions of Trump’s economic agenda, and has even won over some former opponents on Wall Street. 

But the Key Square Capital boss has come under attack as a purported record of poor returns at his hedge fund circulated across chat groups on Wall Street and beyond.

Some familiar with deepening Lutnick-Bessent rivalry said that it could point to growing divisions within Trump’s inner circle.

Now, Trump has widened the field to include Kevin Warsh, former Federal Reserve governor; Marc Rowan, CEO of Apollo Global Management; Senator Bill Hagerty of Tennessee; and Robert Lighthizer, Trump’s former US trade representative. 

Dealmakers have said Rowan is a strong pick given his experience at transforming his private equity group into a global alternative asset manager with about $700bn assets under management, but warned that it would be hard for him to step away from his day job.

Warsh, meanwhile, has long been discussed as a possible replacement for Federal Reserve chair Jay Powell when his term expires in May 2026.

Team 47: who’s made the cut

The president-elect has selected Fox News host and former congressman Sean Duffy to be his transportation secretary. (CNN)

Trump picked Big Tech critic Brendan Carr to head up the Federal Communications Commission, which regulates TV, internet services and radio.

Oil boss Chris Wright has been named energy secretary, putting him at the heart of efforts to loosen restrictions on fossil fuels.

North Dakota governor Doug Burgum has been tapped for interior secretary, and will also be Trump’s energy tsar, heading up the new Council of National Energy.

Karoline Leavitt, the Trump campaign’s press secretary, will become White House press secretary.

Transitional times: the latest headlines

What we’re hearing

China’s ambassador to the US is frantically trying to connect with Trump’s circle after struggling to arrange meetings with Republicans in Washington in recent years.

Xie Feng has stepped up his efforts by hosting dozens of former US officials and China experts at his home, people familiar with the situation told the FT’s Demetri Sevastopulo.

Every ambassador in Washington is trying to get to know people who may join the second Trump administration. But Beijing is at a particular disadvantage because Republicans haven’t been too keen to engage with Chinese officials as Washington has become more hawkish on China.

Evan Medeiros, a former top White House Asia official, said Trump’s victory caught China “flat footed”.

“They were scrambling around Washington and New York to find connections to Trump. They were asking Democratic analysts how to manage the Trump team,” said Medeiros, who met Xie before the election. “They essentially have one play: persuade business leaders around Trump to go soft on China.”

“They don’t appear to have the links to the Trump team they had last time,” said one person who has met Xie and his team. “The core question they were asking is, “What does Trump want?”

Viewpoints

• As Trump charts the path of destruction for the country, Edward Luce points out an irony: the US government is in desperate need of reform.

• Though markets are enjoying a short-term post-election sugar high, Rana Foroohar is already dreading the downturn that will surely come.  

• Amid Trump’s mostly dumbfounding cabinet picks, the FT editorial board points out that two sources of hope remain.

• The domestic damage that Trump and his policies bring will delight the country’s real enemies: Moscow and Beijing, writes Gideon Rachman.  

• Liberals have developed their own odd dialect, which puts Democrats at a disadvantage compared with the plain-speaking right, says Janan Ganesh.