With the departure of Gary Cohn, President Donald Trump’s chief economic advisor and one of the last and loudest anti-protectionist voices among the White House’s senior ranks, the administration is at a crossroads over what comes next.
Cohn has been viewed by policy experts and Wall Street analysts as a voice of reason in the White House – attempting to push the president toward a more pro-trade agenda and away from the isolationist ideals of senior officials like trade advisor Peter Navarro and Commerce Secretary Wilbur Ross.
The president is now tasked with replacing him – a decision White House press secretary Sarah Huckabee Sanders said Wednesday that Trump would “take his time” with – and his selection could say a great deal about the direction in which he wants to go. Trump could choose an isolationist to fill the void. Navarro is among several names that has been floated as an early contender for Cohn’s job, and such a pick would likely portend more aggressive trade action – particularly against China – in the months ahead.
“Already the discussion is shifting to additional protectionist measures the U.S. could implement on China for intellectual property violations,” Scott Anderson, chief economist and executive vice president at Bank of the West Economics, wrote in a research note Wednesday. “These new protectionist actions could include restrictions on Chinese U.S. investments, U.S. exports of intellectual property to China, as well as additional import tariffs on China – raising the risk of a full-blown trade war opening up between the two largest economies in the world.”
Cohn was long rumored to have been considering resigning from his position – though Trump’s upcoming 25 percent tariff on imported steel and 10 percent duty on foreign aluminum appear to have been the final straws. He has been a regular advocate for open trade, aligning him more with senior GOP lawmakers than the economic advisory team that Trump has assembled around him.
Cohn to Step Down
Trump – who has repeatedly stated that he likes conflict and different points of view among those closest to him – could opt to replace Cohn with a candidate cut from a similar cloth. Larry Kudlow, a conservative economic analyst who for years has maintained a presence at CNBC, is among the more globalist-leaning individuals believed to be on the president’s shortlist.
Kudlow was asked on air Wednesday whether he would accept the job if it were offered to him, but he demurred, saying he enjoys his work at CNBC and doesn’t “want to walk through all these scenarios.”
Kudlow has praised the Trump administration for its tax overhaul and regulatory repeal efforts, and he’s believed to be in good standing with the president. Still, he made his policy preferences clear on Wednesday, saying that, although he considers Navarro to be a “good guy,” he’s just not a fan of “blanket tariffs.”
“I don’t want to punish our friends and allies and let the real bad actors get off either equally or not much,” Kudlow said. “I would have preferred different actions on this. I myself urged Gary Cohn to stick around.”
But Cohn’s departure, in the midst of a rapidly evolving news cycle that can veer 180 degrees with the issuance of a single tweet, means lawmakers and investors have lost an element of familiarity and predictability within the White House.