President Donald Trump this week upended not just his tariff strategy but his trade team. Former hedge fund manager and Treasury Secretary Scott Bessent — the White House’s main conduit to beleaguered financial markets — is now at the helm, with populist Peter Navarro relegated to the sidelines and Wall Street punching bag Howard Lutnick recast into the role of “bad cop,” according to three people close to the White House, granted anonymity to speak frankly about internal dynamics.
The Shift in Trade Dynamics
The diminished roles of Lutnick, the Commerce secretary who for weeks had been the administration’s point person for foreign leaders on tariffs, and Navarro, Trump’s trade adviser, reflect this week’s turmoil over Trump’s trade policy and a shift toward the “fair trade” policies Bessent has been advocating. One of the people, who is close to both Trump and Navarro, said the trade hawk still has the ear of the president, adding that Trump respects Navarro’s aggressive populism, but that “doesn’t mean he’s at the center of it.” A second person said the White House believes it can leverage Lutnick’s difficult personality in negotiations.
Two of the people added that Elon Musk, who has been vocally advocating against the president’s tariff regime, has not been a factor in the discussions or that his name had not been mentioned to them.
The Path Forward
The personnel shuffle comes amid a tug-of-war in the White House between the “fair trade” and protectionist camps, with Trump on Wednesday levying, and then pausing, a hefty regime of tariffs on dozens of countries he said had long “ripped off” the United States. The White House is now trying to chart a path forward as it navigates dozens of individual trade deals with countries in just a couple of months — and grapples with the fallout from 10 percent levies against every country in the world and a massive trade war with China that still threatens to send the United States into a recession.
The trade team is also struggling with a loss of credibility after weeks of mixed messages that sparked market fluctuations and added to ongoing confusion among trade partners and financial leaders about what the White House wants and what the president’s endgame is. Allies are hoping to use that confusion — intentional or not — as leverage.
Trade Negotiations and Market Impact
“Trump likes to first create chaos, and then calm, chaos, calm — just to keep everybody guessing,” said a former Trump administration official, who like others in this story was granted anonymity to speak frankly.
That calm and chaos also exists in Trump’s orbit, which is a perpetual game of chess as players move in and out of the circle of influence. While the knife fighting of Trump’s first administration has largely been absent from his second, the shakeup on who is leading tariff policy is a reminder that the fights for influence and proximity are not over.
Bessent, who traveled to Florida Sunday to meet with Trump to urge him to shift his messaging before the new tariffs took effect, has emerged as a soothing presence and a voice of reason to the financial world amid this week’s fracas over new and sweeping levies the White House planned to impose on dozens of countries. During a Thursday Cabinet meeting, he framed himself, Lutnick and U.S. Trade Representative Jamieson Greer as leading the negotiations, along with Trump.
“I’ve had these countries call me up. ‘Secretary Bessent, we’re happy you’re going to be negotiating,’” Bessent said. “Well, President Trump’s going to be involved too.”
Insights and Challenges
Asked about the shifts on the team, White House press secretary Karoline Leavitt said “Bessent, Lutnick, Greer, Navarro, and [White House National Economic Council Director Kevin] Hassett have all been part of the team and continue to be.”
White House allies have in recent weeks described Lutnick as abrasive and a clunky messenger for the president, illustrated in a recent television interview in which he said reshoring efforts would result in an “army of millions and millions of human beings screwing in little screws to make iPhones” coming to the country. One of the people close to the White House said that chief of staff Susie Wiles is trying to keep Lutnick from making further television appearances.
The former administration official added that Lutnick “has an aggressive tone when he speaks, and foreign country leaders interpret that as condescending.”
The official, however, also argued that Navarro has not lost clout because he never had any formal authority.
“Navarro can’t be sidelined from negotiations, because Navarro was never leading negotiations,” the official said. “He’s not a Cabinet member so he doesn’t have legal authority over trade measures. His role is simply to advise the president.”
Fears over a sinking bond market persuaded the president to change course on Wednesday and lift the so-called reciprocal tariffs for 90 days, while leaving in place a baseline 10 percent tariff.
The decision came as relief to Wall Street and foreign leaders across the globe, but it comes as only a temporary, and partial, fix to the broader economic shakeup Trump promises to implement as part of this trade overhaul. Trump upped his staggering tariffs on China on Wednesday, slapping the country with a new 125 percent tariff amid the countries’ tit-for-tat tariff battle, one that threatens to have staggering consequences for the U.S. economy and drive inflation.
Though markets rallied on Trump’s 90-day pause on Wednesday, they were down again Thursday, the apparent result of the reality of the trade war with China sinking in. As of 2 p.m. on Wednesday, the S&P 500 was down 3 percent and the Dow was down more than 1,000 points from open.
Already, Trump has confirmed that the U.S. is entering trade talks with Japan and South Korea. Other countries — including the United Kingdom, India and Australia — separately confirmed they are interested in negotiations or sending delegations to Washington.
