Gary Cohn, who helped usher in the sweeping individual and corporate tax cuts law in December, is leaving the Trump administration, in part, because of his objection to the president’s decision to slap tariffs on imported steel and aluminum. Cohn, the president’s chief economic adviser and a former Goldman Sachs executive, still seems to enjoy a good relationship with Trump, such that there could be a Cohn 2.0 in 2020.
The announcement on tariffs today is a component of President Trump’s America First agenda, upon which he campaigned as bringing back U.S. manufacturing jobs from overseas. Cohn, a Democrat, is more identified with the globalist camp, comprised of both establishment Republicans and Democrats who favor open border policies in the context of both people and products. Nationalists or populists are more oriented toward protecting internal sovereignty. Trump, a former Democrat and independent before running for president on the GOP ticket, has insisted that he also favors free trade as long as it is fair trade.
In the proclamation signed today and which takes effect in 15 days, Trump is instituting a 25 percent tariff on imported steel and 10 percent on imported aluminum, which the administration says is justified for economic and national security reasons, and that the downstream effect on domestic prices will be minimal. Critics claim, however, that the move could ignite a so-called trade war owing to protectionism and harm the U.S. economy.
The president granted a temporary exemption for Canada and Mexico, subject to pending negotiations over reforming the North American Free Trade Agreement. Trump also expressed a willingness to modify tariffs on imports from other nations under appropriate circumstances.
“The decline of American steel and aluminum production has resulted in extensive job losses for hardworking Americans in industries critical to our national security and economic well-being,” the White House claimed, according to Fox News.
Trump gave fellow New Yorker Gary Cohn a glowing sendoff today during the White House cabinet meeting.
“This is Gary Cohn’s last meeting in the cabinet. He’s been terrific. He may be a globalist, but I still like him. He is seriously a globalist, but in his own way, he’s a nationalist, he loves our country. He’s going to go out and make another couple of hundred million, and then he’s going to maybe come back. We’ll be here another seven years hopefully, but I have a feeling you’ll be back.”
The U.S. is said to be largest importer of steel in the world. Trump and like-minded economists have accused foreign governments of fostering the unfair trade practice of “dumping” steel (and many other goods for that matter) into America at below-market rates to put domestic manufacturers out of business. The U.S. runs a massive trade deficit with most countries.
“Since the announcement, U.S. Steel has announced it is reopening a plant in Illinois, while Century Aluminum officials have said the tariffs could generate 300 new jobs in Kentucky,” CNBC reported.
Trump has been railing against the trade imbalance with China, in particular, long before becoming a politician.
In a tweet today, Tesla and SpaceX founder and CEO Elon Musk noted that a 25 percent import duty is put on an American car going to China, while a Chinese car imported into the U.S. only pays 2.5 percent.
Separately, North Korean dictator Kim Jong Un has invited President Trump for face-to-face talks about denuclearization, and the president has apparently accepted. North Korea missile testing will reportedly be suspended during the interim. In the past, Trump critics have accused him of inflaming tensions in the region through tweets and other comments about the leader he has derisively branded “little rocket man.”