WHITE HOUSE ECONOMIC advisor Gary Cohn became the latest casualty of President Donald Trump’s administration,resigning in protest as Trump stepped up his threats of steep tariffs on steel, aluminum and European cars.
Asian stocks opened lower this morning amid fears the American president would embark on a more protectionist drive, despite US stocks finishing higher partly due to expectations for a detente in the Korean peninsula but with investors still struggling to discern whether Trump would follow through on restrictive trade measures.
Cohn led the charge on a tax cut proposal approved by Congress in December, but lost the internal struggle against more protectionist voices over trade tariffs.
“Gary has been my chief economic advisor and did a superb job in driving our agenda,” Trump said in a statement. “He is a rare talent, and I thank him for his dedicated service.”
The White House downplayed the idea Cohn resigned over more aggressive trade policies, but only moments before the announcement, Trump showed no signs of backing down even in the face of opposition from his own party.
Speaking to reporters, Trump said he was elected to protect American workers and industries that had been harmed by years of unfair trade policies.
“Our country has been taken advantage of by everybody. By everybody. And we cannot let that happen any longer,” Trump said during a joint press conference with Swedish Prime Minister Stefan Lofven.
But Trump’s aggressive plan to impose 25 percent tariffs on steel and 10 percent on aluminum, against friend and foe alike, angered US trading partners.
It also startled US automakers and firms that rely on those metals and the free flow of trade.
Even administration officials were caught off guard by the announcement late last week, since the legal review had not been completed.
Reports of Cohn’s likely resignation began to circulate almost immediately.
It appears the 57-year-old former Goldman Sachs executive was drowned out by a decidedly more protectionist team including trade adviser Peter Navarro and Commerce Secretary Wilbur Ross.
Trump, in a tweet, said he would “soon” appoint a replacement.
“Many people wanting the job – will choose wisely!” he wrote.
Republican opposition
Cohn is the latest in a long string of senior advisors to resign or be fired, a virtually unprecedented turnover of administration staff.
Hope Hicks, perhaps Trump’s most trusted confidante, announced last Wednesday that she would resign as communications director.
Her move followed the departures of chief of staff Reince Priebus, national security advisor Michael Flynn, and others.
Markets became convinced yesterday that the tariffs might not be that bad and a trade war could be averted, but Cohn’s departure could portend a rocky trading session today.
The tariff plan – which Trump followed up with a threat to impose “reciprocal taxes” on all imports from countries that charge duties on US exports – also sent shivers through Republican leaders, whose party has traditionally embraced free trade.
House Speaker Paul Ryan was in the vanguard, calling on Trump to have a “smarter” plan that was “more surgical and more targeted”.
While there was “clearly abuse occurring” regarding overcapacity and dumping particularly by China, protectionist measures could have the “unintended consequences” of a trade war, Ryan told reporters.
But Trump once again dismissed the concerns about sparking a global confrontation, saying “trade wars aren’t so bad… the trade war hurts them. It doesn’t hurt us”.
Earlier, Treasury Secretary Steven Mnuchin said Trump understands “the potential impact” of the measures on the economy.
Mnuchin noted that he has been working on the specifics of the tariff plan, which will be announced this week, “and I think we have a way of managing through this”.
Trump himself said, somewhat cryptically, that the measures will be imposed “in a long, loving way”.
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