Get Premium Data for Cyber Monday: Up to 55% Off InvestingProCLAIM SALE

Mnuchin won't rejoin Trump administration, but has advice on sanctions, debt

Published 2024/11/10, 13:15
Updated 2024/11/10, 13:22
© Reuters. FILE PHOTO: Steve Mnuchin speaks next to U.S. President Donald Trump after being sworn in as Treasury Secretary in the Oval Office of the White House in Washington February 13, 2017. REUTERS/Yuri Gripas/File Photo
SQ
-

By David Lawder

WASHINGTON (Reuters) - Donald Trump's former Treasury secretary, Steven Mnuchin, said he will not seek to join the president-elect's new administration but is ready to offer advice to his successor, including on how to strengthen sanctions on Iran and Russia and contain the growth of U.S. debt.

In an interview, Mnuchin told Reuters it was important for the Treasury to work towards strengthening U.S. trade policy. This includes holding Beijing to its U.S. goods purchase commitments in Trump's January 2020 Phase One deal to rebalance U.S.-China trade, which he said "they're not living up to."

Serving as Treasury chief during Trump's first term "was the experience of a lifetime, and I'm happy to advise on the outside," Mnuchin said on Friday. "I'm sure they'll have a lot of great choices."

He declined to name any favorites.

Reuters reported on Friday that two prominent hedge fund investors, Scott Bessent, founder of Key Square (NYSE:SQ) Group, and John Paulson had emerged as the top contenders for Treasury secretary, and that Bessent had met with Trump.

Mnuchin founded Liberty Strategic Capital, a private equity firm, after leaving office with investments from Softbank Group (TYO:9984) and Abu Dhabi's Mubadala sovereign wealth fund.

ECONOMIC TEAM

Mnuchin said it was important that all parts of Trump's economic team - the Treasury, Commerce Department, U.S. Trade Representative's office and White House National Economic Council - work closely together as a group, as they did during trade and tariff negotiations with China in 2018 and 2019.

Mnuchin, a former Goldman Sachs executive, said financial markets experience was important for the Treasury secretary to have, but so is a strong management background. This is because Treasury spans vast areas of the economy from regulatory and tax policy to international sanctions, with the latter taking considerable time during his tenure, he said.

The U.S. needs stronger enforcement of financial sanctions and more actions to cut off oil revenues from Iran and Russia, he said, noting that sanctions on Russia over its war in Ukraine have been "more of a headline" than effective.

A G7-imposed price cap of $60 per barrel of Russian crude oil may be reducing Russia's oil revenues, but "Russia is selling plenty of oil and gas," he added.

These actions need to be combined with an increase in U.S. oil and gas production and stronger output from other Middle East countries to make up for sanctions-reduced supplies from Russia and Iran to keep prices stable, Mnuchin said.

MANAGING DEFICITS

Asked whether Trump's plans to extend expiring individual tax cuts next year and end taxes on tips, Social Security and overtime income would run up a worrisome amount of U.S. debt, Mnuchin said that growing deficits needed to be brought under control.

He said he believes that Congress and the administration can strike a balance between extending the tax cuts and finding savings in both discretionary and non-discretionary spending. Some revenue will be made up through stronger economic growth and from Trump's higher tariffs, he added.

Mnuchin defended the Trump administration's heavy COVID-19 relief spending which, along with a revenue collapse during the pandemic, led to a record $3.1 trillion deficit in fiscal 2020, but he said the Biden administration had overspent.

© Reuters. FILE PHOTO: Steve Mnuchin speaks next to U.S. President Donald Trump after being sworn in as Treasury Secretary in the Oval Office of the White House in Washington February 13, 2017. REUTERS/Yuri Gripas/File Photo

The U.S. deficit in fiscal 2024 ended on Sept. 30 topped $1.8 trillion, the highest outside of the COVID era, as public debt interest costs exceeded $1 trillion for the first time.

"I think the spending we did in COVID was necessary, or there would have been a worldwide depression, not a recession," Mnuchin said. "But I think the ongoing spending of the Biden administration clearly created inflation and created big deficits, and that has to be addressed."

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.