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Trade skeptics gain upper hand in White House as Cohn quits
WASHINGTON (Reuters) - Economic nationalists appeared to gain the upper hand in a White House battle over trade with the resignation of Donald Trump’s top economic adviser, Gary Cohn, on Tuesday in a move that could ramp up protectionist measures that risk igniting a global trade war. Cohn did not spell out the reasons for his resignation. He had told Trump that markets would slump on a tariffs threat and was regarded as a bulwark of economic orthodoxy in an administration whose protectionist policies have sparked alarm among U.S. legislators and in governments around the world.Find the more business news today news from SHINE.
Cohn’s resignation came after Trump said he was sticking with plans to impose hefty tariffs on steel and aluminum imports. While the measures on their own are relatively small, the risk is that an emboldened Trump administration will push ahead with a full-scale economic confrontation with China.
America’s trade deficit with China hit $375.2 billion in 2017, equivalent to two-thirds of the country’s total trade deficit of $566 billion. Trump has said he will remedy what he terms the jobs- and industry-destroying deficits.
“The economic nationalists now certainly have the upper hand and their camp is bigger. I think they are going to be very influential in the administration,” said Monica de Bolle, a senior fellow at the Peterson Institute for International Economics, a Washington-based think tank.
The Trump administration has launched an investigation into intellectual property abuses by China, which could dwarf any impact of the steel and aluminum proposals and trigger a sharp response from Beijing. Trump has said the fines could be huge.
With Cohn’s departure, the profile of Peter Navarro, an anti-China economist who favors protectionist measures, appears to have risen within the White House.
Navarro has written extensively of China’s military and economic threat to the United States in a series of books, including “Death by China: Confronting the Dragon — A Global Call to Action.”