How Scott Bessent won the ‘knife fight’ to be Trump’s Treasury secretary

The longtime investor and his allies launched a public-relations campaign to cement his frontrunner status.

Scott Bessent, US President-elect Donald Trump’s pick to be the next secretary of the Treasury. Picture: David Geraghty/The Australian.

It was Scott Bessent’s job to lose – and he almost did.

But after two weeks of uncertainty, Donald Trump selected Bessent, a longtime investor, as his next Treasury secretary. The pick capped a drawn-out, behind-the-scenes game of thrones marked by suspicion, personal animus and last-minute U-turns.

Bessent was the odds-on favourite to land the coveted cabinet post in a second Trump administration – long before the former president won the election. Trump called the Key Square Capital Management founder “one of the most brilliant men on Wall Street” and praised him in private conversations with friends and advisers.

All the while, Bessent and his allies executed a public-relations campaign aimed at cementing his frontrunner status, booking him on cable news shows that Trump is known to watch and placing op-eds in the media outlets he follows closely. Bessent was at Mar-a-Lago, Trump’s private club in Florida, for hours in the build-up to Trump officially releasing the decision.

Trump told friends shortly before the Bessent announcement that he trusted him to execute the administration’s policies more than any of the other contenders. Trump’s advisers also said that the president-elect, who is known to take appearance into account when hiring, felt that the gray-haired, bespectacled Bessent looked the part.

But Bessent’s glide path was upended by an 11th-hour play for the job by Cantor Fitzgerald Chief Executive Howard Lutnick, which culminated in Elon Musk signalling to his 200 million social media followers that he backed Lutnick and viewed Bessent as a “business-as-usual choice.” As the deliberations dragged on, Trump at times expressed frustration with his options – and the many leaks about the process – prompting him to bring additional candidates into the mix.

The warring factions that nearly derailed Bessent’s chances could offer a preview of what is to come as Trump prepares to retake the White House. The president-elect’s inner circle is populated with powerful billionaires and outspoken populists with competing agendas and megaphones of their own, portending a fractious second term defined by policy disagreements.

Lutnick and Bessent’s relationship frayed to the point that some of Trump’s advisers worried they wouldn’t be able to work together in the incoming administration. The president-elect’s longtime aides, many of whom grew accustomed to the interpersonal squabbling that was commonplace in his first term, were stunned by the two men’s apparent disdain for one another and the extent to which they were publicly and privately battling over the job. Trump said Tuesday that he plans to nominate Lutnick as Commerce secretary.

Last week, a Trump adviser compared the tension between Bessent and Lutnick, co-chair of the transition, to a cold war. Days later, the same adviser said it could be more accurately described as a knife fight. A political adviser for Wall Street executives aware of the infighting sent an emoji of a spinning game-show wheel to describe how some in the finance world believed Trump was deciding who his next Treasury secretary would be.

Feuding allies Shortly after Election Day, Trump privately complained to aides that Bessent and Lutnick, who were two of his closest allies in the finance world, weren’t getting along, according to people familiar with the matter.

Allies of both Lutnick and Bessent had been co-ordinating fierce campaigns to boost the profile of their preferred Treasury candidates, and tear down their opponents for the job. Bessent’s allies informed Trump’s team that Lutnick hosted Hillary Clinton in New York in 2015 when she was running against Trump to become commander in chief. An invite to the event lists Lutnick as the sole host and tickets going for $US2,700 a head.

Bessent’s opponents regularly reminded Trump that Bessent worked for years at an investment firm run by George Soros, a frequent boogeyman of conservatives. They also circulated to Trump’s advisers returns from Key Square, the investment firm Bessent founded, that they argued showed years of unremarkable performance, hoping to raise questions about his finance bona fides, according to people familiar with the matter. But the data was truncated to leave out years in which Key Square outperformed and excluded a successful business he spun out, Bessent’s allies said.

Bessent’s critics argued to Trump’s advisers that Bessent wasn’t a true believer in the president-elect’s plans to impose tariffs on US imports, pointing to an October Financial Times interview in which Bessent appeared to make the case that Trump’s tariff threats were subject to negotiation and may be watered down. “My general view is that at the end of the day, he’s a free trader,” Bessent told the newspaper. “It’s escalate to de-escalate.” A month later, Bessent penned an opinion column on Fox News’ website underscoring his support for tariffs. “Used strategically, tariffs can increase revenue to the Treasury, encourage businesses to restore production and reduce our reliance on industrial production from strategic rivals,” Bessent wrote.

Last weekend, the infighting between the two businessmen became so bitter and public – Musk and Robert F. Kennedy Jr. both weighed in on social media – that Trump felt he had to consider other candidates. Trump’s aides reached out to two men that Trump has long had on his radar for key roles in his administration: Former Federal Reserve Governor Kevin Warsh and Apollo Global Management CEO Marc Rowan.

New candidates By Wednesday, Warsh and Rowan had arrived at Mar-a-Lago to interview for the job. Rowan flew in from Hong Kong just to speak with Trump about the role. But there were signs from those meetings that neither Rowan nor Warsh was the perfect fit.

Warsh told Trump that he wanted to be chairman of the Federal Reserve after Jerome Powell’s term came to an end in 2026. Trump and Warsh discussed the idea of the former Wall Street executive being Treasury secretary for a little over a year, only for him to then be nominated as Fed chair, The Wall Street Journal previously reported. In that scenario, Bessent would have been director of the National Economic Council and he would have later been named Treasury secretary to succeed Warsh.

During his job interview, Rowan met with Trump, Lutnick and Linda McMahon, who is the co-chair of Trump’s transition team and his nominee to lead the Education Department. A person familiar with the matter described the meeting as friendly. But another person familiar with the meeting said Trump felt that the Apollo Global CEO wouldn’t see eye-to-eye with the president-elect on his widespread tariff proposals, and that the president-elect felt similarly about Warsh.

Trump’s nascent economic team is likely to grapple with the same fundamental policy disagreements that dominated his first term, when advisers with differing world views clashed about the direction of the then-president’s economic agenda. Some of Trump’s outside economic advisers privately hope he doesn’t follow through on his pledge to slap across-the-board tariffs on all US imports, arguing that he should use the threat as leverage in trade negotiations. Others close to the president say he should stick to his most protectionist impulses.

Trump has called for an across-the-board tariff of up to 20 per cent on US imports. He has proposed a tariff of 60 per cent on goods from China and at least a 200 per cent tariff on vehicles from Mexico.

On Friday, just hours before Trump announced the long-awaited pick, the leading contenders were in the dark about who he would choose. Trump advisers checked in with Rowan to see if he truly wanted the job, and he told the team he did, according to a person familiar with the outreach.

During the process, Trump called top Wall Street executives for advice. Among them was veteran investor John Paulson, who Trump briefly considered for Treasury secretary, according to a person familiar with the matter. The president-elect, people close to him said, had been focused on how the markets would react to his pick, and his advisers argued that Bessent would be seen by analysts as a steadying force in his administration.

Trump released a statement naming Bessent for the job around 6.55pm. ET on Friday, nearly three hours after the markets closed.

— Gregory Zuckerman contributed to this article.

The Wall Street Journal