White House economic adviser Gary Cohn is resigning after failing to persuade President Donald Trump to abandon his proposed steel and aluminum tariffs, officials say. Photo credit: Reuters
WASHINGTON — Gary Cohn’s departure from the White House is a victory for the protectionists who have sought to push President Donald Trump to fully embrace their views.
The former Goldman Sachs Group Inc. president said Tuesday he would resign after what had become a bitter and personal dispute within the White House over Trump’s plan to slap steep tariffs on imported steel and aluminum — a stance widely decried by the automotive industry.
His departure is a victory for figures who have sought to expunge the Trump administration of advocates for free trade and globalization, principles that have long been a hallmark of the Washington establishment.
A registered Democrat, Cohn was regarded as one of the few political moderates close to the president. His absence will amplify voices like Commerce Secretary Wilbur Ross and trade adviser Peter Navarro who back the president’s impulses to buck convention and pick trade fights on a global stage.
Cohn also served as a counterbalance to figures such as Senior Adviser Stephen Miller and Chief of Staff John Kelly, who have pushed Trump to the right on immigration — and worked to keep him there — and have encouraged the president’s forays into the culture wars.
Investors, spooked by Cohn’s exit, were seen bracing for the impact Wednesday as U.S. equity futures slumped. The prospect of escalating protectionism earlier depressed stock markets in Asia, and the Stoxx Europe 600 Index headed for the first drop in three days, led by mining and auto shares.
Officials familiar with Cohn’s departure said his resignation was the culmination of his aggressive campaign to persuade Trump to abandon his proposed steel and aluminum tariffs, even after the president made his snap announcement last Thursday.
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Cohn had argued repeatedly and passionately to Trump that the tariffs on imported metals would damage the relationship between the U.S. and its closest allies while threatening to erase some of the benefits of $1.5 trillion tax cut legislation the president signed into law late last year.
Cohn had organized a meeting at the White House later this week where he planned for the president to hear directly from executives of industries that consume the metals, such as automakers. The meeting was canceled after Cohn announced his resignation. The meeting will go forward, but with Vice President Mike Pence instead of Trump, according to a person familiar with the executives’ communications.
The gulf between the president and Cohn was made plain in a dramatic trade policy meeting on Tuesday in the Oval Office.
As aides discussed the logistics of making the president’s proposed 25 percent tariff on steel and 10 percent tariff on aluminum official, Trump sought confirmation from his advisers that he had their support.
According to two people with knowledge of the exchange, Trump specifically asked Cohn: We’re all on the same team, right? He then asked if Cohn supported the decision.
Cohn didn’t answer, the people said. A senior White House official disputed that Trump asked directly for Cohn’s support and didn’t recall Trump’s remark about being on the same team.
Cohn agreed with Trump that the U.S. should take a tougher stance toward China, but believed metals tariffs that also hit Canada, Mexico and the European Union are counterproductive, the official said.
The senior official said that Cohn had told the president in February that he felt underused and that he should have a larger role in the White House — and if that wasn’t possible, he would consider leaving. Cohn plans to stay until the end of the month to help Trump choose a new economic adviser, and would consider returning to the administration for a larger role such as a Cabinet post, the official said.
On Tuesday evening, Trump wrote on Twitter that he would soon make a decision on a replacement. “Many people wanting the job — choose wisely,” he said.
Trump began Wednesday with a call to reverse a trend he said has cost the U.S. more than 55,000 factories, 6 million manufacturing jobs and trade deficits totaling more than $12 trillion since President George H.W. Bush was in office. “Last year we had a Trade Deficit of almost 800 Billion Dollars. Bad Policies & Leadership. Must WIN again!” he said on Twitter.
It won’t take long to see the impact of the rising nationalist tide within the West Wing. The U.S. is hoping to complete renegotiation of the North American Free Trade Agreement before Mexico’s elections in July, and with major issues still outstanding, the president may be more inclined to walk away from the trilateral trade pact.
“Our time is running very short,” U.S. Trade Representative Robert Lighthizer said Monday.