Top Economic Adviser Gary Cohn has decided to resign after failing to convince Trump not to implement high tariffs on steel and aluminum.
“It has been an honor to serve my country and enact pro-growth economic policies to benefit the American people, in particular the passage of historic tax reform,” said Cohn. “I am grateful to the president for giving me this opportunity and wish him and the administration great success in the future.”
Cohn, a former Goldman Sachs executive, has a reputation as a shrewd businessman with a pro-trade worldview. During his 14 months at the White House, Cohn oversaw a major overhaul of the tax code and pushed for a substantial rewrite of financial rules.
Last week, Cohn told aides he might resign if Trump followed through with the tariffs.
“I don’t think he suddenly lost an argument. He just never won it,” said Joshua Bolten, who served as George W. Bush’s chief of staff from 2006 to 2009. “He’s done a very effective job through rational argumentation and maybe through bureaucratic maneuvering in staving off the day of reckoning.”
That day of reckoning occurred last week when President Trump announced new tariffs on steel and aluminum (25% and 10% respectively) that will affect all trading partners.
The announcement, which followed a clandestine meeting between Trump and a handful of tariff supporters, came as a complete surprise to most Administration officials.
“There is extreme frustration when the process breaks down,” said one official, adding that the process was “hijacked” by White House “nationals.”
Anxiety on Wall Street
Cohn’s decision to resign could cause further anxiety for investors “who saw him as a steady hand in an otherwise unpredictable administration,” reports Newsmax. With both Cohn and former Chief Strategist Steven Bannon gone, the future of Trump’s economic policy could be steered by Commerce Sec. Wilbur Ross and Treasury Sec. Steven Mnuchin.
“More than anyone else in the White House, Cohn had credibility with the markets,” said financial policy analyst Ian Katz. “If we go several days without news of a replacement, investors could get edgy.”
Wall Street fears the steel and aluminum tariffs will ignite a trade war that could damage the US economy. Key trade partners, including Canada and the EU, have already criticized the new tariffs as unacceptable.
“Gary has been my chief economic adviser and did a superb job in driving our agenda,” said Trump. “He is a rare talent, and I thank him for his dedicated service to the American people.”
Possible successors include WH economic adviser Peter Navarro, CNBC commentator Lawrence Kudlow, and Council of Economy Advisers Chairman Kevin Hassett.