How Scott Bessent won the Treasury secretary battle

Good morning and welcome to White House Watch!

We’ll be off on Thursday for the Thanksgiving holiday and back in a week. But before we stuff ourselves, let’s get into:

• How Scott Bessent won the Treasury battle

• Palace intrigue at Mar-a-Lago

• What Trump could do to Nato

After so much Treasury secretary drama, Scott Bessent came out on top.

Trump’s court cycled through candidates in what became a bitter contest, but the president-elect came full circle in selecting Bessent [free to read]. The move signalled that Trump — not Elon Musk or anybody else — makes the big calls. 

A priority for Trump was tapping a staunch supporter of his populist economic policies, particularly the sweeping tariffs he campaigned on (just last night he said he would slap 25 per cent tariffs on all goods from Mexico and Canada, and extra levies on Chinese imports).

Apollo Global Management chief executive Marc Rowan, who was on the Treasury shortlist, made it clear to Trump that he would not be a yes man, an independent streak that probably hurt his candidacy, according to people familiar with the matter.

Trump’s other priority was installing someone who would protect his most treasured metric: the US stock market. 

As the candidates battled and the president-elect remained unsure, Bessent needed to grab Trump’s attention back. Bessent’s camp shared documents showing that his hedge fund, Key Square Management, had stellar returns during the pandemic to bolster the case that the billionaire had the skills to navigate tough economic conditions.

Once Trump ultimately announced his decision, the accolades for Bessent rolled in, including from Larry Kudlow, Trump’s former National Economic Council director. Kudlow told the FT that Bessent was “absolutely first rate” and an “excellent choice”. There was also a general sense of relief among many Wall Street investors.

But others lamented the decision. An influential investor said that Rowan would have been a better choice. “Marc manages nearly a trillion dollars, he’s the smartest guy on Wall Street and populists fear smart people,” said the investor. “Bessent is likely to follow Trump’s lead.”

Team 47: who’s made the cut

Pam Bondi is Trump’s new pick for attorney-general after Matt Gaetz dropped out — the clearest sign yet that the president-elect’s plans to undermine rival power centres in Washington could face resistance.

Oregon congresswoman Lori Chavez-DeRemer is Trump’s nominee for labour secretary.

Ex-NFL player Scott Turner has been tapped to lead the Department of Housing and Urban Development.

Brooke Rollins, who served on Trump’s economic advisory council in his first term, has been nominated to be secretary of agriculture.

Transitional times: the latest headlines

• Special counsel Jack Smith has moved to dismiss both federal criminal cases against Trump.

• Mar-a-Lago is gripped by palace intrigue as billionaires flock to the “winter White House” to curry favour with the president-elect’s court. [Free to read] 

• Joe Biden is trying to Trump-proof his legacy in a final push to deliver more aid to Ukraine, lock in manufacturing subsidies and confirm federal judges. 

• The incoming administration’s vow to crack down on the “censorship cartel” has terrified professionals who combat misinformation — and put Big Tech on notice.

• The White House’s top economic official has warned Trump will trigger a “period of chaos” and sharp price rises if he guts Biden’s manufacturing tax credits and imposes sweeping tariffs.

What we’re hearing

The US has played an outsized role in Nato for 75 years, but Trump’s return to the presidency has raised the spectre of a war in Europe in which Nato allies might not be able to count on Washington’s full support — or maybe any support at all.

Amid questions over what exactly Trump will do about Nato — or when — it’s also unclear how Republican infighting over the US’s commitment to the alliance could unfold.

Mike Waltz and Marco Rubio — Trump’s respective picks for national security adviser and secretary of state — are no doves on Russia and are unlikely to support the US abandoning Nato. 

But Washington could still pull back. There are roughly 90,000 US troops in Europe, up from about 65,000 when Russia annexed Crimea a decade ago.

There are also proposals circulating among conservative Republicans about the US instead acting as the very last line of defence should anything happen. One described the possibility of a “dormant Nato”, and argued that Washington should provide Nato with logistical support only “as a last resort”.

Meanwhile, the Heritage Foundation’s Project 2025 said European members should deal with the “great majority of the conventional forces required to deter Russia” while the US provides a nuclear deterrent and “select other capabilities”.

On paper, Nato’s European members have never been better prepared to defend their continent — but whether they can do so without US military capabilities and leadership is another matter.

Viewpoints

• The film Wicked offers guidance for a fractured America as people retreat to their bubbles post-election, says Patti Waldmeir.  

• Shahin Vallée envisions Bessent being to Trump what James Baker was to Ronald Reagan, bringing about “a global deal to realign the world’s major currencies and achieve some level of fiscal adjustment”. 

• The International Criminal Court’s arrest warrants for Israeli Prime Minister Benjamin Netanyahu and ex-defence minister Yoav Gallant will split the western alliance just as Trump is poised to upend it, writes Gideon Rachman.

• Trump’s win is an emblem of the marriage between techno-determinism and libertarianism, aiming to end all constraints on markets. But history shows the trend is not built to last, warns Rana Foroohar.