[CTC] Fwd: Trump bypasses Lighthizer. Again.

[Arthur Stamoulis]

More on Trump's Wall Street cabinet and USMCA...

---------- Forwarded message ---------
From: POLITICO's Weekly Trade <weeklytrade at email.politico.com>
Date: Mon, Nov 25, 2024 at 10:01 AM
Subject: Trump bypasses Lighthizer. Again.
To: <arthur at citizenstrade.org>


Delivered every Monday by 10 a.m., Weekly Trade examines the latest news in
global trade politics and policy.
Nov 25, 2024 View in browser
<https://go.politicoemail.com/?qs=aac4fefa8464c96ea747e62d416f714e9894a3fedae21987088e968c8ca1390815e1c0a99e2b8277d2d538badcbcc6f1>

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By Ari Hawkins <ahawkins at politico.com>

*With help from Doug Palmer and Camille Gijs*

[image: Republican presidential nominee former President Donald Trump,
left, listens as investor Scott Bessent speaks on the economy in Asheville,
N.C., Wednesday, Aug. 14, 2024.]

Scott Bessent, the founder of the Connecticut-based hedge fund Key Square
Group, was tapped to serve as Donald Trump's Treasury secretary. | Matt
Kelley/AP
QUICK FIX

*— President-elect Donald Trump has selected hedge fund manager Scott
Bessent* as Treasury secretary, despite concerns over Wall Street’s
commitment to sweeping tariffs.

*— Mexican President Claudia Sheinbaum said Canadian Prime Minister Justin
Trudeau *"does not agree" with removing Mexico from the USMCA.

*— Canada will host a meeting of the commission overseeing* the
Comprehensive and Progressive Agreement for Trans-Pacific Partnership in
Vancouver.

*It’s Monday, Nov. 25. Welcome back to Morning Trade.* Got tips?
Suggestions? Want to grab a coffee? Hit us up at: ahawkins at politico.com,
gbade at politico.com and dpalmer at politico.com. You can follow us on X:
@_AriHawkins
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@GavinBade
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and @tradereporter
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.
Driving the day

*LIGHTHIZER SNUBBED: *Donald Trump has nominated hedge fund manager Scott
Bessent as Treasury secretary, dealing a blow to protectionist forces in
Washington who favored his former trade chief, Robert Lighthizer, for the
top economic role.

The founder of the Key Square Group investment firm was hailed by Trump as “one
of the most brilliant men on Wall Street
<https://go.politicoemail.com/?qs=aac4fefa8464c96ec0c40f7c44fe0644186c6bfccd8a68745aa6684e0c079757d60249dcf66434527f04bb77eb090934>”
and a “widely respected” investor and economic strategist.

Bessent, if confirmed by the Senate, would be one of several Wall Street
billionaires lining Trump’s Cabinet. He’d be keenly focused on preventing
disruptions to financial markets or the broader economy while implementing
the president-elect’s agenda.

Trump’s choice of a seasoned financier could alleviate some economists’
fears over his tariff plan backfiring on the U.S. — much like
then-President Herbert Hoover’s decision to sign the Smoot-Hawley Tariff
Act of 1930
<https://go.politicoemail.com/?qs=aac4fefa8464c96e75838be6d72a4c97c289f75e7bf4f3133acbbb811c8f813bf912a775697e1d05ad27ce8d5de01500>,
which led to retaliation and the failure of overseas banks.

As a Yale University graduate who also taught there as a professor of
economic history, Bessent “understands the impact of Smoot–Hawley tariffs
in terms of aggravating the Great Depression. He would not be in favor of
all tariffs all the time, the way Trump says,” Jeffrey Sonnenfeld,
president of the Yale Chief Executive Leadership Institute and an informal
advisor to five U.S. presidents, told Morning Trade.

That could mean rejecting the most aggressive promises Trump made on the
campaign trail out right — like imposing universal tariffs of 20 percent
and swapping the income tax with tariffs — and pursuing more targeted (or
strategic) tariffs aimed at select sectors and foreign adversaries like
China.

The Treasury announcement comes on the heels of Trump’s decision to tap
Wall Street CEO Howard Lutnick as Commerce secretary, whom Trump has
suggested will oversee the Office of the U.S. Trade Representative. (That's
a move that would require Congress' buy-in,
<https://go.politicoemail.com/?qs=aac4fefa8464c96e9dd4d337b60fd431e33690046f524142f6eec9d7e70f604ca2f7663311f926fbd2f6241c560f2113>
and it’s not clear whether Trump will actually end up demoting his
yet-to-be-named USTR.)

*Still, Trump’s picks to lead Commerce and Treasury are poised to aggravate
hardcore protectionists, *who have warned against Cabinet picks that hew
close to Wall Street. Those decisions are leaving trade policy watchers
wondering
<https://go.politicoemail.com/?qs=aac4fefa8464c96ed36e1d0edaed1821426228231e5e4432a138dbaa08669eeb3834efe4f3b5319cb9e5920e135d557c>
what role, if any, Lighthizer will play in trade and economic policy for
the next Trump administration.

“Robert Emmet Lighthizer NEEDS to be Treasury secretary. Why is he not in
the publicly disclosed mix? He is the BEST choice by far!” wrote Michael
Stumo
<https://go.politicoemail.com/?qs=aac4fefa8464c96e192809bc6c2c0e147b128d522b72957c892271cc672788f190369bf9f1fc841cc520797a5610c1da>,
CEO of the Coalition for a Prosperous America, on X, prior to the selection
being made public.

Lori Wallach, the director of the left-leaning Rethink Trade and a longtime
friend of the former USTR, trashed Bessent and Lutnick as free traders
<https://go.politicoemail.com/?qs=aac4fefa8464c96e60d18c133f3a7ef6b279fa28a2995538e6685ee547749c55439d15935a7d763a3093afd321d01b0e>.
In a separate post, Wallach highlighted remarks from Bessent where he claimed
his goal for Trump would be to
<https://go.politicoemail.com/?qs=aac4fefa8464c96e8454c9825e0f32895ad114c19132090ef75f2c96898c1b8582a7da3061e76527d5299d9874224afc>
“save international trade [and] not end up looking like something with turn
of the century tariffs.”

*For now, Trump’s pro-tariff allies are projecting confidence: *“The reason
why this took so long is because Trump wanted somebody that not only the
stock market would react positively to, but even more importantly, was
unquestionably going to implement his agenda,” said one person close to
Trump’s transition, who is also a close ally to Lighthizer. “[Bessent] told
the president that he is 100 percent committed to implementing the trade
and tariff agenda.”


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*.*



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Around the World

*MEXICO DISMISSES USMCA SCRUTINY: *Mexican President Claudia Sheinbaum on
Thursday played down Canadian Prime Minister Justin Trudeau‘s concerns over
Mexico's trade ties with China.

“The prime minister does not agree to take Mexico out of the treaty. He
told me very clearly and we agreed to continue talking,” Sheinbaum said during
a daily press briefing
<https://go.politicoemail.com/?qs=aac4fefa8464c96eed61fa7c3fd16e84ed40d61312b05c276eb1e89c6c8ce3d82710c2a7040fd64330ce162debb82147>,
according to a rough translation, referring to the USMCA. She added that
Canadian officials “have their own elections soon, so they also use these
issues as part of an election campaign.”

The remarks come as both the United States and Canada escalate scrutiny on
Mexico ahead of a scheduled 2026 review of the pact, which could lead to
major changes to the deal. Trudeau indicated on Thursday
<https://go.politicoemail.com/?qs=aac4fefa8464c96e949d4ead2017a84bbb989d5fa1d5be00c61a3023534d1664163abfebbfd2c3eda95103c2991c38a9>
that pushing Mexico out of the agreement was an option, although not his
“first choice.”

But, he noted, “there have been real and genuine concerns raised about
Chinese investment into Mexico that I brought up directly with the Mexican
president.”

Meanwhile, Canada’s Foreign Affairs Minister Mélanie Joly was in Washington
last week, where she met with GOP Sens. Lindsey Graham
<https://go.politicoemail.com/?qs=aac4fefa8464c96e85537d04bcbcbdaca7c5cb59d9fd6826ca51fd35f695d643a6cf75d1dabed4806f80027949f9200d>
(R-S.C.) and Rick Scott
<https://go.politicoemail.com/?qs=aac4fefa8464c96ed82ab34b01c5474ee3abf30231bc6456eaf67b94bdf8aa37ecefcb6899887ce7b5c8aa66457ade64>
(R-Fla.). In a briefing, she said the U.S. and Canada are on the same page
when it comes to Mexico’s supposed role in helping China evade trade
restrictions.

*APPELLATE BODY STILL MIA: *The facilitator of the reform of the dispute
settlement body, Mauritius’ Ambassador to the WTO, Usha Dwarka-Canabady, urged
WTO members last week
<https://go.politicoemail.com/?qs=aac4fefa8464c96ec9fda453fccb701a80fe7be107b2a69525f29335f9eb836a0e264754f88df4d11a2eb3063d614c5d>
to be more flexible to come up with a consolidated text to finally reform
the moribund Appellate Body.

WTO members agreed in June 2022 to have a fully functioning dispute
settlement mechanism by 2024. And when they failed to reach agreement by
the WTO’s 13th Ministerial Conference in Abu Dhabi in February, the group’s
General Council meeting mid-December became the next target.
REGULATORY REVIEW

*CPTPP COMMISSION MEETING: *Canada will host a formal meeting in Vancouver
this Wednesday and Thursday of the commission that oversees the
Comprehensive and Progressive Agreement for Trans-Pacific Partnership.
However, don’t expect a final decision on China’s three-year-old
application to join the regional trade agreement.

Costa Rica, Ecuador and Taiwan have also asked to join the pact, which
recently welcomed the U.K. into its fold. At last year’s meeting in New
Zealand
<https://go.politicoemail.com/?qs=aac4fefa8464c96e63a2f68adb4df55b4836c98becf7c75a077c0b93839f4b7b04ff639afd900b35e726a3e7bd8e27fa>,
commission members said they had started “an information-gathering process
… to gather factual information on whether aspirant economies can meet the
CPTPP’s high standards.”

China’s bid is the most politically complicated because of the implications
its membership would have for CPTPP relations with the United States.

*OLIVE FIGHT UPDATE:* The Biden administration on Friday challenged the
EU’s request at the World Trade Organization
<https://go.politicoemail.com/?qs=aac4fefa8464c96eb0cf94b94ed57db77b0122457624395b0b81922cd9fe5f11db145ba37b21009843568c46a4ad2ca9>
to impose $35 million worth of trade sanctions on the United States in a
dispute over U.S. duties on Spanish olives. The action sends the issue to
arbitration to decide the actual retaliation amount.


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*.*


TRADE OVERNIGHT

— Trump taps loyalist Brooke Rollins for USDA chief in surprise pick, POLITICO
reports
<https://go.politicoemail.com/?qs=aac4fefa8464c96e4020e4f35facaa7f1de1ae83f66c48f6e5a4eb959b5f609d02dabf7c92c7f02890292dec5fe1055c>
.

— The Homeland Security Department added 29 Chinese companies to a list of
entities suspected of ties to forced labor, per an announcement
<https://go.politicoemail.com/?qs=4db65588bff1da07fc10793f37e51489ab77d9eca4e0cb4deee1fcc5a2b7e1d477f590bcbf717a34896ad8f3d84080ce>
.

— U.S. allies try to convince each other that everything will be OK under
Trump, POLITICO Pro reports
<https://go.politicoemail.com/?qs=4db65588bff1da07f71b2cb86add65848340da178b0ce959d07dd24ac65e4b07e26230f991b21a82c7dfb7b712909653>
.

— Sen. Sherrod Brown
<https://go.politicoemail.com/?qs=4db65588bff1da0719107d878fb737b7528bd7d2e7ebcc96176a68216111cab66d2f1c7b6d0915220f4d722a82d42d97>
(D-Ohio) won't rule out running for Senate again, POLITICO reports
<https://go.politicoemail.com/?qs=4db65588bff1da0797c995a541c7e69c8431273a8c818336592c5a03a350f5a979b2c8b14a0a7931a994840752b1760c>
.

— Climate summit approves divisive $300 billion deal, POLITICO Pro reports
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.

*THAT’S ALL FOR MORNING TRADE! *See you again soon! In the meantime, drop
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