UPDATE 5-After tariff fight loss, Trump economic adviser Cohn quits

Published 2018-03-06, 09:56 p/m
© Reuters.  UPDATE 5-After tariff fight loss, Trump economic adviser Cohn quits
GS
-
BNPP
-

By Jeff Mason and Ayesha Rascoe

WASHINGTON, March 6 (Reuters) - Gary Cohn, the top economic adviser to U.S. President Donald Trump and a voice for WallStreet in the White House, said on Tuesday he would resign, amove that came after he lost a fight over Trump's plans forhefty steel and aluminum import tariffs.

The departure of Cohn, director of the National EconomicCouncil, was expected to be finalized in a few weeks and willblow a hole in Trump's already depleted advisory team at a timewhen the economy is growing but markets are volatile.

Trump said in a tweet on Tuesday night that he "will bemaking a decision soon" on replacing Cohn. Administrationofficials said Peter Navarro, director of the White HouseNational Trade Council, and conservative commentator LarryKudlow were the "top two candidates" for the job.

White House officials said the tariffs dispute contributedto Cohn's decision to leave but that it was not the sole reason.One official cited several issues and noted: "His biggestmission was on the tax cut bill, which he got passed."

It was the latest in a series of high-profile departuresfrom the White House, which Trump downplayed on Tuesday.

Asked at a news conference with the Swedish prime ministerabout high staff turnover, Trump said: "Many, many people wantevery single job. ... I could take any position in the WhiteHouse and I'll have a choice of the 10 top people having to dowith that position. Everybody wants to be there." told Trump about his decision to resign on Tuesday, buthe and the president had been discussing his possible departurefor weeks, a White House official said.

Cohn did not show up for Trump's news conference on Tuesday,despite a seat being set aside for him.

STOCKS FALTER

Following the news on Cohn, the U.S. dollar weakened andU.S. stock futures fell more than 1 percent, with analystsciting increased uncertainty about the U.S. economic agenda.

"One of the adults in the room has left. The markets willworry that this is a signal that we will definitely go aheadwith these tariffs," said Paul Mortimer-Lee, chief marketeconomist at BNP Paribas (PA:BNPP) corporate and investment banking.

Without Cohn in the picture, Navarro, an economist, willlikely have a clearer field to pursue a protectionist agenda,which squares with Trump's long-held concerns about trade.

Trump said last week he would impose import tariffs of 25percent on steel and 10 percent on aluminum, a move criticizedby some prominent Republicans, but backed by some Democrats.

Trump's announcement followed an intense debate within theWhite House between Cohn and Navarro and their respectiveallies, said White House officials.

"The chances of us having a trade war have now increased ...The economic nationalists now certainly have the upper hand,”said Monica de Bolle, a senior fellow at the Peterson Institutefor International Economics, a think tank.

HELPED DRIVE TAX OVERHAUL

Cohn, 57, who served in the White House for a little morethan a year, achieved an early rapport with Trump and provedinfluential in the administration's decisions last April not tolabel China a currency manipulator and to renegotiate the NorthAmerican Free Trade Agreement, instead of terminating it.

He was a driver of the tax overhaul enacted in December,Trump's only major legislative achievement of 2017.

After the tax package was approved, Cohn tackled aninfrastructure initiative, but it has been slow to gain tractionand will likely be further hampered by his departure.

"It has been an honor to serve my country and enactpro-growth economic policies to benefit the American people, inparticular the passage of historic tax reform," Cohn said in astatement issued by the White House.

"I am grateful to the president for giving me thisopportunity and wish him and the administration great success inthe future," said Cohn.

His relationship with Trump began to sour in mid-2017 afterCohn disagreed with the president's tepid response to clashesbetween neo-Nazis and anti-racism protesters in Charlottesville,Virginia, sources close to Cohn said. a Democrat, aligned himself in the constantly shiftingWhite House power structure with fellow centrists such asTrump's son-in-law, Jared Kushner, and daughter Ivanka Trump.

Formerly president and chief operating officer of investmentbank Goldman Sachs Group Inc (NYSE:GS) GS.N , Cohn was often cited bybusiness lobbyists as their strongest ally in the White House.

"More than anyone else in the White House, Cohn hadcredibility with the markets ... Now that he's out, the questionis who takes over that mantle," said financial firm CapitalAlpha Partners analyst Ian Katz in a late research note.

The White House senior staff under Trump saw a 34 percentturnover rate in 2017, compared with first-year turnover ratesof 9 percent under former President Barack Obama, 6 percentunder President George W. Bush and 11 percent under PresidentBill Clinton, according to Cowen & Co analyst Chris Krueger.

In a statement, Trump credited Cohn for his work on the taxpackage and said: "He is a rare talent, and I thank him for hisdedicated service to the American people."

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^BREAKINGVIEWS-Cohn exit makes White House chaos markets' problem

5-Trade skeptics gain upper hand in White House as Cohnquits

resignation is latest Trump administrationdeparture

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.
© 2007-2025 - Fusion Media Limited. All Rights Reserved.