Wall Street’s ‘sigh of relief’ over Trump’s Treasury pick

Good morning from the Financial Times. Today is Monday, November 25th, and this is your FT News Briefing. Huawei is getting ready to launch a smartphone with all Chinese software, and the world has just barely come together to support climate finance. Plus, we look at how China is winning friends and influencing people in Latin America. Its companies have been buying up strategic stakes and investing in strategic projects across the region.

I'm Kasha Brucealyan, and here's the news you need to start your day. Huawei has a new operating system, and it's turning heads. We'll get a proper look on Tuesday when the Chinese tech giant launches its latest flagship phone. The device will run on something called HarmonyOS Next, and we'll have all its own native apps.

That's a major development for Huawei and gets it closer to competing with Apple's iOS and Google's Android systems. The turning point is also a sign of how US sanctions may have actually helped the company advance. The US cut Huawei's access to Google mobile services back in 2019. That forced the company to focus on its own operating system and they've been building on it ever since.

Wall Street has been breathing easier ever since Donald Trump picked Scott Bessent as Treasury Secretary. The announcement on Friday ended a long and at times acrimonious nominating process. Bessent will now be responsible for implementing the President-elect's plans to cut taxes and increase tariffs. The FT's Colby Smith is here to break it all down for me. Hey Colby. Hi there. So first of all, what do we know about Scott Bessent? What's his story?

So Scott is a hedge fund manager and he's a pretty well-known name on Wall Street. He's been working for years for George Soros, who's the liberal billionaire investor. But Bessent really has established himself as a kind of strong voice when it comes to economic and financial issues.

and just the nature of his hedge fund in general, which is a kind of global macro shop. He's really well versed in a lot of the topics that a Treasury Secretary would need to be versed in, whether it's the state of the global economy, the kind of inner workings of global financial markets. So he's seen as a really credible pick who has the expertise that's important for that position.

And you know, it actually looked like there was quite a bit of uncertainty about who would get this top job. Why do you think that is and what might have been going through Trump's mind while he was deliberating?

Yeah, it was a really long drawn out affair, actually. There were a lot of twists and turns, and at any given moment, it wasn't quite clear exactly how things were gonna shake out. So it's one of the most important positions in the cabinet, and basically, this is the top economic job. The person in this position is responsible for keeping the US economy stable, and I think the thing that was kind of top of mind was if the pick was not something that was well received by Wall Street in particular,

the reaction in financial markets could have been quite swift and quite severe. But instead, I think what you saw when Besant was chosen was a pretty positive reaction across the board from people both within and outside of Trump's circle. And let's dig into that just a little bit more. What sort of challenges will Besant likely face if he's confirmed by the Senate?

It's a pretty wide ranging list here, honestly. And Mark Sobel, who's a former treasury official, explained it kind of really well to me. He said that it's not an appetizing meal when he starts in this job in January. He has to sell the tax cuts, which are going to be quite impactful to debt and deficit levels in the US, which is already somewhat of an issue. He's going to have to sell tariffs, which

depending on how they are rolled out and the severity are potentially going to have pretty severe knock on effects in terms of the economy. Those are just a couple of the most immediate things that Besant is going to be facing on day one. And do we have any insights based on his background about how he thinks about things like tax cuts and tariff hikes?

So he's been a pretty staunch advocate of what Trump has put forward, saying that these types of policies from tax cuts to tariffs to deregulation, this is all going to be a net positive for the economy. It's not going to lead to resurgent inflation, which is something that economists had really warned about. But I think he's also shown some pragmatism, which is why he's been so appealing to Wall Street.

So, for instance, actually in an interview with The Financial Times, he talked about tariffs as a kind of maximalist policy, something that was a tool of leverage as opposed to something that might be actually borne out exactly the way that Trump has described it. And I think that people have just taken that to mean that

He's going to do what he can to kind of push back on the elements of Trump's plans that might be detrimental to the economy or to financial markets. He's going to keep things on stable footing. Colby Smith is the US economics editor for the FT. Thanks, Colby. Thank you.

The UN Climate Conference COP 29 ended over the weekend with a deal, $300 billion a year by 2035. That's what rich countries will spend to help poor nations deal with the effects of climate change. It'll come in the form of public finance, bilateral deals, and multilateral efforts. This new finance goal is an insurance policy for humanity.

But it certainly wasn't easy to get there. Talks almost collapsed late Saturday night. This document is nothing more than an optical illusion. This, in our opinion, will not address the enormity of the challenge we all face.

Delegates from poorer nations have blasted the agreement. They're arguing that it falls far short of what is actually needed. Economists put that figure at $1.3 trillion a year.

The US might be losing the battle for Latin America to China. The two superpowers have been competing for years for greater influence in the region. And now a pair of photographs from recent global summits seems to announce the winner. My colleague, Michael Stott, has been scrutinizing the images, and he's here to tell me more. Hey, Michael. Hello, Kasha. So can you just explain these photos that I'm talking about and the sort of symbolism behind them?

Yes, so one photo is from the APEC summit, and the other one is from the G20 summit last week in Rio de Janeiro. In both pictures, President Xi Jinping is front and centre, literally, in the picture, and his Latin American host is standing next to him.

President Biden in one picture is near the end of the back row. And in the G20 picture, he's not there at all. So they send a very powerful message. They act as a metaphor for what's going on in the region. In Latin America, the US has been losing influence relatively to China. It's been losing the battle for investment and trade to China now steadily over the last two decades.

Yeah, so you say it's this metaphor that Washington has been left in the cold a bit here, and China now has a seat at the table. But why does that matter? Tell me what's at stake here. So Latin America is one of the world's most resource-rich regions. It's particularly rich in some of the minerals that are needed for the energy transition, you know, our new electric world. So it's got 57%, for example, of global lithium, 37% of the copper, nearly a fifth of the oil.

third of the fresh water. And that's something China has figured out. And China has a very well worked out strategy for investing in the region and gaining greater access to those resources. So let's talk about that a bit more. How have China and the US been jockeying for favor in the region to get access to these resources?

So in China's case, Kasia, it started back in 2000 with China buying more and more commodities and trade mushroomed over the last two decades. So if we go back to 2000, China was only doing $12 billion a year of trade with the whole of Latin America. Last year, it did $450 billion and it's become a very large investor too in the region.

Initially, it started making loans to governments, and then more recently, its companies, the state-backed companies and the state-owned companies, have been buying up strategic stakes and investing in strategic projects, things like mining, ports, technology across the region. What about the US? What sort of investments has it been making in the region recently?

So the big difference is that in the US case, you have private sector companies making their own decisions and the government saying it wants to do something else. So the US government has been saying now in both the first Trump administration and the Biden administration that they want to see the US investing more. They want to see the US investing in strategic sectors. But the problem is in the US, the private sector is independent. It makes its own decisions.

In the Chinese case, you have a very well-coordinated strategy with the government saying, we want stakes in these key industries, and a whole host of Chinese banks and Chinese companies following the government's instructions. That, of course, makes it very hard to compete. I guess I'm wondering then, what does it mean for the US to lose its prominence in Latin America?

I think it's a very serious challenge. I mean, this is a region that used to be known in the US as the US backyard. It's not a term Washington likes to use these days, but it is the home region. So there's also, if you like, a wasted opportunity because these are countries that could be working much more closely with the United States. But of course, for that, you need free trade deals. And a lot of South American countries would love to have a free trade deal with the United States.

But that's something in the current political climate in Washington, which is simply not happening. Michael Stott is the FT's Latin America editor. Thanks, Michael. Thanks, Cashew. You can read more on all of these stories for free when you click the links in our show notes. This has been your daily FT News Briefing. Make sure you check back tomorrow for the latest business news.