Trump's top economic adviser Gary Cohn announced his resignation last night following a disagreement over tariffs on steel and aluminum imports and the situation in the White House appears to be far more ugly than it would initially seem.
Bloomberg reports that Trump asked for Cohn's loyalty directly yesterday morning before his resignation. Cohn reportedly offered support for more targeted actions, but that wasn't enough.
Cohn would not offer his support, according to two people familiar with the episode -- and just hours later, the White House announced Cohn’s resignation. [...]
This person also said that Cohn even agreed with Trump on the need for a tougher stance on China, but that any metals tariffs that also hit Canada, Mexico and the European Union seemed counterproductive.
That's actually the pleasant part.
The more ugly story involves Trump repeatedly calling Cohn a "globalist" which, if you didn't know, has become a Republican code word for "Jew," and Cohn accusing Trump's other advisers of lying to him.
Arguments in the White House reportedly pitted Gary Cohn and Trump's former staff secretary Rob Porter against Commerce Secretary Wilbur Ross and Trade Council chairman Peter Navarro according to Axios.
Cohn tried to argue that these tariffs would ruin Trump's record-setting stock market streak and wipe away benefits of tax reform. But Trump kept saying Cohn was a "globalist" while he himself was an economic nationalist.
After making his points, Cohn said there was no point continuing the argument given he'd laid out the facts. He moved to the couches and asked Ross and Navarro: "Where are your facts?"
Cohn later told associates he believed Navarro and Ross were lying to the president. Asked about this, a Commerce spokesman retorted: "The facts that form the basis for this decision are laid out in the two 232 reports that Secretary Ross submitted to the President. No one has refuted the facts in those reports." (Cohn and others told associates that Ross didn't properly analyze the negative downstream impacts of the steel tariffs.)
Navarro argued that Trump needed to protect the domestic industry, promote American jobs and show the world we were going to be tough on trade and this was the best way to do it. Porter argued tariffs would hurt the manufacturing industries that use steel and aluminum as inputs, tax American consumers, roil global markets, alienate allies and lead to retaliation.
Assuming this report is accurate, and I have no reason to think it isn't, everything Cohn and Porter said is correct.
You may or may not be interested in reading a transcript from the arguments happening in the Oval Office, but this can tell us what direction the White House will be moving in going forward.
Gary Cohn (and Porter) is out and the rest of the economy may follow him. There are virtually no moderating voices remaining in Trump's inner circle which is now exclusively populated by hardliners like Peter Navarro and Trump's trade representative Robert Lighthizer. Navarro has been advising Trump that we should withdraw from the North American Free Trade Agreement (NAFTA) and Lighthizer believes we should use tariffs to extort our closest allies and trade partners.
For his part, Wilbur Ross is not so much a hardliner as he is a doddering old fool whose understanding of economics was frozen in a time capsule sometime before man first set foot on the moon. Ross is currently being sued by his former business partners and you may recall the Forbes removed him from their list of billionaires after discovering that he has lied about his wealth and success.
You don't have to defend or praise Gary Cohn to acknowledge that there are worse people than him or that he'll probably be replaced by someone much worse who won't object to anything Trump does. He may be replaced by someone like Lighthizer and Navarro who will actively feed Trump misinformation.
This wouldn't be quite as concerning if Trump actually understood how the modern economy works, but he doesn't. Trump doesn't even understand what trade deficits are or why they exist. He doesn't understand anything.