Wall Street's early evaluation of Treasury Secretary nominee Scott Bensent has come out—and it's positive. But now the difficult part begins.

In the coming months, Bensent will face immense challenges as he attempts to appease the markets while promoting Trump's unconventional plans.

President-elect Trump abruptly announced on Monday evening local time that on his first day in office, he would impose a 25% tariff on 'all products' from Mexico and Canada and a new 10% tariff on China.

If implemented after he takes office, these two measures could disrupt importers hoping for a gradual rollout of tariffs, and Bensent's own recent comments on tariffs and the Fed could complicate his task further.

However, currently, buoyed by optimism about this 'investor favorite' candidate for Treasury Secretary, the Dow Jones Industrial Average rose more than 400 points on Monday.

This optimism partly stems from the fact that, among more alternative choices like Lutnick, Trump ultimately chose a familiar figure with a long investment record in the macroeconomic environment as his chief economic officer.

Ian Bremmer, president of the Eurasia Group, stated in a report on Monday morning: 'Trump's economic team is more pragmatic, particularly Bensent.'

Here are reasons why his honeymoon period with Wall Street may gradually end or be brief:

Tricky tariff issues

The first tricky issue will be tariffs.

Earlier this month, Bensent publicly expressed his affection for Trump's tariff plan through a commentary article on Fox News while he was campaigning for this job. However, he also offered some cautious warnings to reassure cautious businesses, contrasting with Trump's frequent expression of a desire for comprehensive tariffs.

He wrote, 'Strategic use of tariffs can increase Treasury revenue, encourage businesses to resume production, and reduce our dependence on industrial products from strategic competitors,' repeatedly emphasizing the need to focus on 'strategically important industries.'

Bensent's critics have been circulating another comment from him in recent days, where he said, 'Trump is actually a free trader,' and his goal is to have Trump 'save international trade rather than revert to tariffs from the turn of the century.'

To put it mildly, this will obviously spark a debate within the government.

Trump often talked during the campaign about how tariffs themselves could generate revenue and frequently expressed a desire to restore tariffs implemented during President William McKinley's administration in the 1890s. Ultimately, the decision rests with Trump.

Harvard University professor and former chairman of Obama's Council of Economic Advisers Jason Furman said on Monday, 'The bigger issue is that major economic decisions will be made by President Trump. Trump hasn't given us any indication that he has given up on large-scale, comprehensive tariffs. I would feel nervous until I hear otherwise.'

Left-wing opposition—particularly regarding the Federal Reserve

Another past comment from Bensent could also become a focus: his idea of a 'shadow' Federal Reserve Chair proposed during the campaign.

He proposed the idea in an October interview that Trump could make the current Fed Chair Powell a 'lame duck' long before the end of his term.

Powell's full term as a member of the Federal Reserve Board does not end until 2028, but his time as Fed Chair will end earlier, in 2026.

Bensent thought at the time that if Trump appointed a successor early, 'based on the concept of forward guidance, no one would really care what Powell had to say.'

According to reports, Bensent has privately abandoned this idea, but on Monday, Senator Elizabeth Warren stated that the Federal Reserve could be a key factor opposing Trump's choice of a potential progressive.

She wrote in a statement, 'Interference by the Trump administration in the independence of the Federal Reserve would be a serious mistake.'

As a current member of the Senate Finance Committee, Warren may meet with Bensent multiple times in the coming years, and she is likely to assume the top position on the Senate Banking Committee in 2025. This is also a matter the market will clearly be watching closely.

Raymond James Washington Policy Analyst Ed Mill stated in a report on Monday that 'any actions that challenge the independence of the Federal Reserve are a constant concern in client discussions.'

Dissatisfaction from the right with 'business as usual' candidates

Bensent may also face dissatisfaction from the right.

In a brutal selection process, he became Trump's choice, but some of Trump's closest allies publicly opposed him. Musk notably referred to Bensent as 'a business as usual choice,' and his remarks were not meant as a compliment.

AGF Investments Chief U.S. Policy Strategist Greg Valliere stated in a report on Monday that Bensent will be 'a member of the cabinet moderates, supported by both parties.'

In fact, since Bensent became a leading candidate for the position a few weeks ago, doubts about him have been swirling among right-wing Republicans. Much of the concern stems from his previous experience as an investment manager at Soros Fund Management, where Soros is the number one 'villain' in right-wing circles.

Bensent left Soros Fund Management in 2015 and co-founded his own investment firm, Key Square Group.

In recent years, Bensent has been a generous donor to the Republican Party, contributing over $3.1 million to Trump and other Republicans during the recent election season, according to government records.

But before that, he had donated to Democrats and Republicans alike, including figures like Hillary and Obama.

Will he be able to fulfill his tax cut promises?

Another pressure point for Bensent is fulfilling Trump's campaign promise to fully extend his 2017 tax cut plan and a dazzling array of additional tax cuts.

Bensent is likely to be responsible for ensuring that these tax cuts can be realized. He referred to these tax cuts as a top priority in an interview with the Wall Street Journal last weekend.

But the road ahead is anything but certain. The federal corporate tax rate could be a particular focus of the market and particularly controversial politically.

Trump has promised to reduce the current 21% tax rate to 15%. However, some within his own party have indicated that this rate may remain the same—or, if they can afford to pay for other priorities, they might even accept raising the rate to 25%.

For Trump and Bensent, the bigger issue in turning these tax cut proposals into law may be the $36 trillion national debt and questions about whether any new expensive tax cuts are feasible.

Chris Whalen, chairman of Whalen Global Advisors, spoke bluntly about future fiscal challenges. He said:

'Trump may not have the opportunity to do what he wants. When the debt gets this big, your options become increasingly limited.'

Article forwarded from: Jin Shi Data