Gary Cohn quits after losing trade battle with TrumpHeat Profit
Gary Cohn, Donald Trump’s top economic adviser, has resigned after losing a heated White House battle over tariffs, dealing a big blow to Washington Republicans and business leaders seeking to prevent the president from igniting a global trade war.
The exit is the latest in a series of high-level White House departures and is likely to fuel concerns about an administration in chaos. It will also raise questions about the direction of US economic policy now that Mr Cohn — a pro-trade, pro-Market former Wall Street banker — is no longer heading the National Economic Council.
Stock prices and the dollar were unsettled as Markets considered the implications, with futures pointing to an opening fall for S&P 500 of 0.7 per cent. Bond prices also strengthened, a signal of demand for safe assets, while equities also fell in Asia and Europe.
In a statement, the White House said Mr Cohn, the 57-year-old former number two at Goldman Sachs who was once considered by Mr Trump as a candidate to lead the Federal Reserve, would be leaving in the coming weeks.
“It has been an honour to serve my country and enact pro-growth economic policies to benefit the American people, in particular the passage of historic tax reform,” Mr Cohn said. “I am grateful to the president for giving me this opportunity and wish him and the administration great success in the future.”
Mr Trump tweeted that he would be “making a decision soon on the appointment of new Chief Economic Advisor. Many people wanting the job — will choose wisely!”
In a statement, the president said Mr Cohn had done “a superb job in driving our agenda, helping to deliver historic tax cuts and reforms and unleashing the American economy once again”. He added: “He is a rare talent, and I thank him for his dedicated service to the American people.”
This is a very jarring moment. Folks have a sense of there being no brakes left on the vehicle and the steering wheel having come off
A pragmatic, focused leader who was popular among White House staffers, Mr Cohn is understood to have resisted to the end Mr Trump’s plans to roll out steel and aluminium tariffs in the name of US national security. He has been joined in opposition to the plan by cabinet members including Steven Mnuchin, Treasury secretary; Rex Tillerson, secretary of state; and Jim Mattis, defence secretary.
Earlier in the day, the president dismissed reports of chaos within his administration, saying his White House had “tremendous energy”. But the president conceded: “I like conflict . . . I like watching it, I like seeing it, and I think it’s the best way to go. I like different points of view.”
Mr Cohn’s resignation comes in the immediate aftermath of the departures of Hope Hicks, former White House communications director, and Rob Porter, who was the staff secretary. It coincides with concerns that the policymaking process has become disorderly despite the presence of John Kelly, who replaced Reince Priebus as chief of staff last year.
Mr Cohn is leaving after Mr Trump ignored his advice and made an ad hoc announcement last week that he planned to impose tariffs of 25 per cent on steel and 10 per cent on aluminium on imports from all countries.
Mr Trump is expected to sign those tariffs into law in the coming days. The EU, Canada and other countries have vowed to retaliate.
Mr Cohn was seen as the most effective voice among centrist pro-trade and pro-business Trump advisers. In the short term, the result is likely to be a powershift toward economic nationalists such as Peter Navarro, a trade adviser, and Wilbur Ross, commerce secretary, both advocates of high tariffs on steel and aluminium.
One Republican policy expert said party leaders, almost all of whom oppose Mr Trump’s tariffs plan, considered Mr Cohn a “guarantor of stability on economic issues”.
“This is a very jarring moment,” the expert said. “Folks have a sense of there being no brakes left on the vehicle and the steering wheel having come off.”
Steve Moore, a Heritage Foundation economist who advised the Trump campaign, said he believed that Larry Kudlow, a CNBC commentator and former Reagan administration official, would be a contender to replace Mr Cohn. “Larry is a great communicator — he can communicate the message on tax cuts, growth and deregulation, the energy policies that Donald Trump has been promoting,” he said.
Mr Kudlow, however, has also been an outspoken critic of Mr Trump’s tariffs plan. “We are imposing sanctions on our own country,” he wrote in a CNBC column. “If ever there were a crisis of logic, this is it.”
Some senior Republicans in Congress openly bemoaned Mr Cohn’s departure. “Gary Cohn has been a strong voice for free Markets and one that will be missed,” said Jeb Hensarling, chairman of the House Financial Services Committee.
“The administration will look very different without him. It will look more populist,” said Michael Strain of the American Enterprise Institute. “Gary Cohn was a leader of the camp in the White House that supported free trade and a traditional — in my view correct — understanding of global commerce. Having him leave is a blow in that important policy area.”
Lloyd Blankfein, Mr Cohn’s former boss at Goldman Sachs, tweeted: “Gary Cohn deserves credit for serving his country in a first class way. I’m sure I join many others who are disappointed to see him leave.”
Mr Cohn’s standing with the president suffered a big blow in August after he broke with Mr Trump over violent protests by neo-Nazis and white supremacists in Charlottesville, Virginia, that left one woman dead.
Mr Cohn told the Financial Times after that episode that he had felt “enormous pressure” to quit following the uproar over the president’s comments blaming “both sides” for the violence and suggesting there were “very fine people” among white supremacist groups.
Mr Cohn went on to play an important role in the main legislative achievement of the Trump administration — the tax reform package passed by Congress late year. But speculation over his potential exit never went away.
Additional reporting by Nicole Bullock in New York