Steven Mnuchin, Treasury secretary nominee for president-elect Donald Trump. (Photographer: Andrew Harrer/Bloomberg)

Trump to Keep Mnuchin, Ross in Cabinet Posts for Now, Sources Say

(Bloomberg) -- Donald Trump plans to keep Treasury Secretary Steven Mnuchin and Commerce Secretary Wilbur Ross amid speculation of a broader shakeup in the president’s Cabinet, according to three people familiar with his thinking.

Trump has signaled that he plans to make changes at the most senior levels of his administration following midterm elections earlier this month in which his party lost control of the House of Representatives. But Mnuchin and Ross, who each have been the subject of reports that Trump is dissatisfied with them, will remain in their posts, the people said.

Trump said Friday he was “extremely happy and proud” of Mnuchin after the Wall Street Journal reported that he was displeased with the Treasury secretary in part for persuading him to select Jerome Powell to lead the Federal Reserve. Trump has openly criticized Powell and the Fed raising interest rates, saying the increases have jeopardized economic growth and a booming stock market.

But Mnuchin also helped drive historic tax cuts through Congress last year and is Trump’s lead enforcer of sanctions against North Korea, Iran, Venezuela and Russia. With the Democrats set to hold a majority in the House next year, Mnuchin will also be the last line of defense in keeping Trump’s tax returns from being released to Congress.

Investors reacted with concern to the Friday report of Mnuchin’s possible departure. Jaret Seiberg, a senior policy analyst at Cowen & Co LLC in Washington, wrote in a client note that removing Mnuchin could derail efforts to reform Fannie Mae and Freddie Mac.

A key figure in trade negotiations with China, Mnuchin will accompany Trump to Buenos Aires this week for the Group of 20 meetings, where the president will meet with Chinese President Xi Jinping. Both leaders have signaled interest in resolving a trade war that has investors on edge.

Ross has been one of the most outspoken advocates of using tariffs to force other countries to lower trade barriers and is part of the administration’s team trying to redraw trade deals around the world. As Commerce secretary, he oversaw investigations into whether national security concerns justify U.S. tariffs on steel and aluminum imports and separately on cars and car parts.

His reports on steel and aluminum led to tariffs on imports of the metals. His report on imported cars has not yet been made public.

©2018 Bloomberg L.P.