Gary Cohn, the top economic adviser to U.S. President Donald Trump and a voice for Wall Street in the White House, said on Tuesday he would resign, a move that came after he lost a fight over Trump’s plans for hefty steel and aluminum import tariffs.
The departure of Cohn, director of the National Economic Council, was expected to be finalized in a few weeks and will blow a hole in Trump’s already depleted advisory team at a time when the economy is growing but markets are volatile.
Trump said in a tweet on Tuesday night that he “will be making a decision soon” on replacing Cohn. Administration officials said Peter Navarro, director of the White House National Trade Council, and conservative commentator Larry Kudlow were the “top two candidates” for the job.
White House officials said the tariffs dispute contributed to Cohn’s decision to leave but that it was not the sole reason. One official cited several issues and noted: “His biggest mission was on the tax cut bill, which he got passed.”
It was the latest in a series of high-profile departures from the White House, which Trump downplayed on Tuesday.
Asked at a news conference with the Swedish prime minister about high staff turnover, Trump said: “Many, many people want every single job. … I could take any position in the White House and I’ll have a choice of the 10 top people having to do with that position. Everybody wants to be there.”
Cohn told Trump about his decision to resign on Tuesday, but he and the president had been discussing his possible departure for 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.
Following the news on Cohn, the U.S. dollar weakened and U.S. stock futures fell more than 1 percent, with analysts citing increased uncertainty about the U.S. economic agenda.
“One of the adults in the room has left. The markets will worry that this is a signal that we will definitely go ahead with these tariffs,” said Paul Mortimer-Lee, chief market economist at BNP Paribas corporate and investment banking.
Without Cohn in the picture, Navarro, an economist, will likely 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 25 percent on steel and 10 percent on aluminum, a move criticized by some prominent Republicans, but backed by some Democrats.
Trump’s announcement followed an intense debate within the White House between Cohn and Navarro and their respective allies, 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 Institute for International Economics, a think tank.
HELPED DRIVE TAX OVERHAUL
Cohn, 57, who served in the White House for a little more than a year, achieved an early rapport with Trump and proved influential in the administration’s decisions last April not to label China a currency manipulator and to renegotiate the North American 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 an infrastructure initiative, but it has been slow to gain traction and will likely be further hampered by his departure.
“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,” Cohn said in a statement issued by the White House.
“I am grateful to the president for giving me this opportunity and wish him and the administration great success in the future,” said Cohn.
His relationship with Trump began to sour in mid-2017 after Cohn disagreed with the president’s tepid response to clashes between neo-Nazis and anti-racism protesters in Charlottesville, Virginia, sources close to Cohn said.
Cohn, a Democrat, aligned himself in the constantly shifting White House power structure with fellow centrists such as Trump’s son-in-law, Jared Kushner, and daughter Ivanka Trump.
Formerly president and chief operating officer of investment bank Goldman Sachs Group Inc, Cohn was often cited by business lobbyists as their strongest ally in the White House.
“More than anyone else in the White House, Cohn had credibility with the markets … Now that he’s out, the question is who takes over that mantle,” said financial firm Capital Alpha Partners analyst Ian Katz in a late research note.
The White House senior staff under Trump saw a 34 percent turnover rate in 2017, compared with first-year turnover rates of 9 percent under former President Barack Obama, 6 percent under President George W. Bush and 11 percent under President Bill Clinton, according to Cowen & Co analyst Chris Krueger.
In a statement, Trump credited Cohn for his work on the tax package and said: “He is a rare talent, and I thank him for his dedicated service to the American people.”