You call this populism?

Dec 05, 2024

POLITICO'S West Wing Playbook: Transition of Power

By Gavin Bade, Lauren Egan, Lisa Kashinsky, Megan Messerly and Ben Johansen

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Welcome to POLITICO’s West Wing Playbook, your guide to the preparations, personnel decisions and policy deliberations of Donald Trump’s transition. POLITICO Pro subscribers receive a version of this newsletter first.

During the campaign, DONALD TRUMP previewed a second term that was going to be more populist than the first. He escalated his tariff threats, doubled down on support for American manufacturing, and named a scion of the populist right — JD VANCE — as his running mate.

Those all pointed to a more aggressive agenda to upend the global trading system — even at the cost of one of his favorite economic metrics: stock market performance. But that’s not how things are panning out.

The news this week that former U.S. trade chief ROBERT LIGHTHIZER will not return to the Trump administration hammered home a stark reality: so far, the protectionist wing of the GOP is losing the battle to influence Trump’s economic policy.

Instead, the advantage is with the globalists — Wall Street types who look more at home in a BILL CLINTON or GEORGE W. BUSH White House than in the new National Populist movement.

With Trump, it’s difficult to know whether this marks a hard reset from his campaign messaging to the administration or a mere zag that portends the ferocious battle that will likely play out on economic matters once he’s in the White House.

Lighthizer was the brain behind Trump’s across-the-board tariff threats on the trail, following a paradigm-shifting first term as trade chief, in which he slapped duties on allies and adversaries alike. This time around, he wanted a bigger job leading either Treasury or Commerce, but was passed over in favor of Wall Street types who are only recent — and reluctant — converts to Trump’s trade agenda.

Trump’s most important economic picks — SCOTT BESSENT for Treasury, HOWARD LUTNICK for Commerce, KEVIN HASSETT for the National Economic Council — are all financial sector figures designed to convince Wall Street that despite Trump’s bellicose campaign rhetoric, he’s not going to do anything that would truly upend the global economy.

Financiers are crowing about it. On Wednesday, hedge fund billionaire KEN GRIFFIN called Trump’s tariff threats “small ball” compared to other geopolitical concerns — a line that’d be unthinkable if Lighthizer was set to run Treasury.

Even so, it hasn’t been a clean sweep for Wall Street. Lighthizer’s ally JAMIESON GREER has been picked to be the U.S. trade representative, union ally Rep. LORI CHAVEZ-DeREMER is set to lead the Department of Labor, and PETER NAVARRO was named to reprise his role as a senior White House trade counsel — a role that Lighthizer didn’t want, because it came with no statutory authority.

But those populist figures start at a significant disadvantage to the Wall Street contingent in the war to influence Trump’s economic policy — at least, that was the opinion of Navarro himself. Right after the election, he foreshadowed a “battle between the MAGA folks and Wall Street folks” during a News Nation appearance.

“I think if you see Wall Street-type people in key places like Treasury or the National Economic Council within the West Wing, that's going to be very, very difficult,” Navarro said. “One of the problems we had in the first term is that Wall Street was continually fighting."

Now, Navarro and his allies are trying to spin the situation for the better.

All the Wall Street nominees, they point out, have been made to bend the knee to Trump’s tariff agenda: Lutnick endorsed huge tariffs in cable news appearances, for instance, and Bessent even penned a Fox News op-ed extolling their virtues. Now that he’s going back to the administration, Navarro told West Wing Playbook that Bessent and Hassett are the “perfect choices” to advance Trump’s trade agenda.

What’s more, they argue, Trump’s tariff threats have only escalated during the transition, like his Truth Social warnings for Canada and Mexico (in contravention of his own reformed NAFTA), promising a 10 percentage point boost to tariffs on China, and even 100 percent tariffs on developing nations if they try to abandon the dollar.

But look closer, and these comments also belie the weakness of the populists at this early stage. Trump’s recent threats align more with Lutnick and Bessent’s view of tariffs — that they are a negotiating tool to get policy concessions from other foreign governments. Contrast that to Lighthizer and Greer’s view that tariffs should be instituted for long periods to help bring manufacturing jobs back to the U.S.

Trump’s allies in Congress are starting to notice the shift.

“There’s a moderation effect in having a balance of voices in the presidency here when it comes to … geopolitical policy, trade policy, capital formation policy,” said Sen. KEVIN CRAMER (R-N.D.). “We’ve already seen that [shift] in Trump's early messages to Canada and Mexico and China on the tariff front.”

But protectionists point out that the war between the factions will be long. And Lighthizer, they point out, is just a phone call away, and could easily resurface in Trump’s inner circle if he tires of the Wall Street crowd.

MESSAGE US — Are you ROBERT LIGHTHIZER? We want to hear from you. And we’ll keep you anonymous! Email us at westwingtips@politico.com.

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POTUS PUZZLER

What was ELI YALE’s role in the THEODORE ROOSEVELT administration?

(Answer at bottom.)

Pro Exclusive

Crapo says he’s withholding judgment on Trump IRS pick, via our BRIAN FALER

Musk, on Capitol Hill, says ‘get rid of all credits,’ via our ANDRES PICON

EV charger rollout ‘where we thought we’d be,’ official says, via our JAMES BIKALES

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Heads up, we're all transition all the time over on our live blog: Inside Congress Live: Transition of Power. Bookmark politico.com/transition to keep up with us.

THE BUREAUCRATS

THE HEGSETH FIGHT: When it comes to PETE HEGSETH’s bid to be Defense secretary, each senator gets a vote. But some members’ support matters more than others, as our JOE GOULD, CONNOR O’BRIEN and ANTHONY ADRAGNA report. Sen. JONI ERNST (R-Iowa), the first female combat veteran elected to the Senate and vocal advocate for survivors of military sexual trauma, is now at the center of Hegseth’s troubled path toward confirmation.

On Thursday, Ernst gave the strongest indication yet that she’s a potential no for Hegseth, who is accused of sexual misconduct — which he denies — and has expressed opposition to women in combat. Asked on Fox News whether she’s not ready to vote for him, she replied: “I think you are right.” Hegseth can afford to lose only three Republican votes in the Senate before his nomination would fall apart, assuming all Democrats are opposed.

Ernst met with Hegseth in her office on Wednesday, calling the meeting a “frank and thorough” conversation, though the senator declined to share details.

RIC, YOUR DESPERATION IS SHOWING: RIC GRENELL, who served as acting director of National Intelligence in Trump’s first administration, went hard in the paint for secretary of State after Trump’s win. After the election, a flurry of social media posts from MAGA influencers in support of him started popping up. Around the same time, as our NATALIE ALLISON and MERIDITH McGRAW report, an associate of Grenell approached conservative influencers, offering paid contracts of as much as five figures to post favorable content about Grenell.

One such contract, obtained by POLITICO, outlined that the influencer would post during “peak posting times,” that “content must appear genuine,” and it could not “appear as an overt advertisement or promotional message.” Organizers told our colleagues the plan never took off.

PREPPED FOR BATTLE: As several of Trump’s Cabinet picks crumble, two other controversial picks — TULSI GABBARD for director of National Intelligence and ROBERT F. KENNEDY JR. for the Department of Health and Human Services — have largely flown under the radar. The Bulwark’s MARC A. CAPUTO reports that Trump is ready to go to war if their nominations fall in peril.

“Confirming Gabbard and Kennedy is seen as an opportunity for the president-elect to cement his legacy of broadening the Republican coalition to include disaffected Democrats and independents,” Caputo writes. “They note that the two are considered Blue MAGA rock stars among the Trump faithful. They’re both loved by the new influential podcasters whom Trump courted this election and give Trump the chance to burnish his anti-establishment bona fides.”

There is an expectation that the president-elect will “expend more of his ‘political capital’ for Gabbard or Kennedy than any of his other nominees,” Caputo writes.

“Frankly, Pete [Hegseth] might not make it,” one Trump adviser said. “We’ll see. I’m not sure if the boss is willing to fight for that because there are people in our own camp who aren’t sure it’s worth it. But Kash [Patel] should get confirmed. And if they try to touch Tulsi and Kennedy, then it’s war.”

SPEAKING OF TULSI … Since becoming Trump’s pick to the top intelligence gig, Gabbard’s posture toward Moscow has prompted some Democrats to suggest she could be “compromised,” and a “Russian asset.” And former advisers to the ex-member of Congress suggest that her views on Russia and VLADIMIR PUTIN have been shaped not by some covert intelligence recruitment as far as they know — but instead by her unorthodox media consumption habits, ABC News’ LUCIEN BRUGGEMAN reports.

Three former Gabbard aides said she regularly shared articles from the Russian website RT — formerly known as Russia Today — which the U.S. intelligence community characterized in 2017 as “the Kremlin’s principal international propaganda outlet."

A message from the Defense Credit Union Council and America’s Credit Unions:

THE DURBIN-MARSHALL CREDIT CARD BILL WILL HARM MILITARY FAMILIES. The Durbin-Marshall Credit Card Bill puts military families at risk, raising banking costs and jeopardizing transaction security. This flawed proposal benefits corporate mega-stores while exploiting service members and veterans. DCUC and America’s Credit Unions stand firmly opposed—our military and their families deserve better.

Agenda Setting

WELCOME, PHARMA: Trump hosted the chief executives of Pfizer, Eli Lilly and PhRMA Wednesday night at Mar-a-Lago, where they discussed how the public and private sectors can collaborate on finding cures for cancer, among other topics, Axios’ HANS NICHOLS reports. The patio dinner is a potential indication that the Trump administration will see the pharma industry as a partner, not just an adversary.

Pfizer CEO ALBERT BOURLA, Lilly CEO DAVID RICKS and PhRMA CEO STEVE UBL were all at the dinner, as well as Trump’s incoming chief of staff SUSIE WILES.

RASKIN PROMISES TO BACK WATCHDOGS: Rep. JAMIE RASKIN of Maryland, who is gunning for his party’s spot atop the House Judiciary Committee, sent letters Thursday to 32 inspectors general assuring them of his support, our JOSH GERSTEIN reports. He also asked them to reach out if Trump or his allies make any effort to interfere with or replace them.

“I write to emphasize our unequivocal support for your leadership as an inspector general, which is more important now than ever,” Raskin wrote in the letters. Some Trump allies have urged the president-elect to remove the watchdogs across the government and install his own picks. One inspector general omitted from the supportive letters from Raskin: JOSEPH CUFFARI of the Department of Homeland Security. In October, Raskin called on Biden to remove Cuffari following an investigation that concluded he gave misleading answers to Congress and wasted taxpayer dollars. He has denied wrongdoings.

A message from the Defense Credit Union Council and America’s Credit Unions:

What We're Reading

Republicans (Quietly) Disagree With Trump on the Fed (POLITICO’s Victoria Guida)

The ‘Mainstream Media’ Has Already Lost (The Atlantic’s Helen Lewis)

Woj’s Next Chapter: Why the Preeminent NBA News Breaker Walked Away (Sports Illustrated’s Chris Mannix)

A message from the Defense Credit Union Council and America’s Credit Unions:

REJECT DURBIN-MARSHALL–PROTECT OUR MILITARY’S READINESS!
Credit card interchange fees, which fund essential security, fraud protection, and efficient transaction processes, are vital to the financial operations of defense credit unions. These fees support low-interest loans, financial counseling, and other critical services tailored specifically for military and veteran members. Reducing interchange fees could threaten the ability of defense credit unions to provide these resources, which are crucial for the financial readiness that directly affects the overall mission readiness for U.S. service members. DCUC and America’s Credit Unions strongly oppose this bill and urge action to safeguard those who serve.

POTUS PUZZLER ANSWER

Teddy Roosevelt and his family were avid animal lovers. They had a colorful macaw named Eli Yale — named after the 18-century British merchant and philanthropist ELIHU YALE, the namesake of Yale University. Roosevelt wrote in June 1902 about the bond between Eli and his son, THEODORE ROOSVELT JR.: “Eli [is] the most gorgeous macaw, with a bill that I think could bite through boiler plate, who crawls all over Ted, and whom I view with dark suspicion.”

A CALL OUT! Do you think you have a harder trivia question? Send us your best one about the presidents, with a citation or sourcing, and we may feature it!

Edited by Jennifer Haberkorn and Zach Montellaro.

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