Tremendous Turmoil At The White House As Trump’s Chief Economic Adviser Resigns

Fringe White House Figures, And Trump, Triumph On Trade Wars


As it often does with this President, it came down to a pledge of loyalty. One that Gary Cohn just couldn’t give. According to Bloomberg, Trump confronted his Chief Economic Adviser seeking assurances Cohn would support him on hefty steel and aluminum tariffs. Cohn reportedly gave no answer, and shortly after, resigned.


Trump’s Chief Economic Adviser (until today) Gary Cohn


And remember that meeting Cohn was arranging that Trump had agreed to attend, where manufacturers potentially hurt by tariffs would have a chance to make their appeal to the President? Forget about it.

So bring those tariffs on!

Cohn’s greatest achievement during his time in the Trump Administration was honchoing the Trump/Republican tax cuts which are now law. Cohn and Trump were never quite right after Trump’s divisive comments on a  white-supremacist march in Charlottesville, Virginia last year after which the President insisted there were “many fine people” marching alongside neo-Nazis.

With Trump continuing to publicly assert trade wars are “easy to win” and do not hurt the U.S., there could be a lot more to come. At a joint news conference with the Prime Minister of Sweden, Trump even found a way to double-down: saying even if the across-the-board tariffs hurt our global allies, in the end they will “respect us much more” and “like us much better”. He also pledged to conduct his trade war “in a very loving way”. Whatever the hell that means…(he didn’t elaborate).

Here’s yet another jaw-dropping clip from the President (click on the photo to play):


Of course, Trump denies any of these or other recent developments represent increasing chaos in the White House, Tweeting “Wrong!” and a touch more ominously: “I still have some people that I want to change (always seeking perfection)”:


Trump also Tweeted he’ll name a replacement for Cohn soon: “many people wanting the job”. This will be an important choice: the stock market’s been very forgiving of Trump. Investors may be less so if he doesn’t pick an experienced, independent thinker well-respected in the industry (as Cohn was).



White House Economic Adviser Peter Navarro Wins!

Since everything in the White House is a zero-sum game, the clear winner in all of this is a little-known figure in Trump’s White House, who’s somehow gotten into the President’s ear of late, and made it resonate.

We profiled Navarro a few days ago; If you read it, God bless you. We’re thinking it’s more likely you skipped past it thinking: “why are they paying so much attention to this marginal, lurking figure in the White House nobody’s ever heard of”?

So we thought we’d run it again today:


Trump’s ”Trade Warrior”

If you listen to the President talk trade these days, nearly everything that comes out of his mouth is exactly what his in-house trade guru, Peter Navarro has been saying for months, years even. Often verbatim. From steel and aluminum imports, to China, to the evil being wrought by the World Trade Organization. This profile of Navarro in Politico foretells nearly everything Trump is doing right now. It’s from last July.

And Navarro himself now also seems to be the person the White House is sending out to defend Trump’s positions on tariffs. Which means, in a White House full of people who seem to be on the “outs” with the President, there’s at least one person who isn’t.

So let’s take a closer look:

Navarro is a trained economist. He has a Ph.D. from Harvard, and was a Professor at Cal Irvine. He also ran for public office several times in California, and lost, mostly as a Democrat.

Legend has it Navarro was hired onto Trump’s team when Jared Kushner found a book he wrote called “Death by China” on and thought that would pique the President’s interest. But we found evidence Trump knew of him way before (perhaps Kushner reminded him). Navarro says he contacted Trump in 2011 after Trump praised one if his earlier books in an interview with Chinese state media. In a fascinating account of that interview, the L.A. Times reports Trump claimed to have read “hundreds of books about China over the decades”, and to “understand the Chinese mind”…

Navarro made a Bannon-like film based on his book, which was largely ridiculed by critics, one writing “it’s the documentary equivalent of a raving street corner derelict”. But its central thesis is one that we happen to agree with at least at least partly: “American companies cannot compete because they’re not competing with Chinese companies, they’re competing with the Chinese government”. Francine LeFrak, daughter of a major New York real estate developer who’s one of Trump’s closest friends and outside advisers, was a producer on Navarro’s film.


A still from Navarro’s documentary “Death by China”

Since coming to the White House, Navarro until now has by-and-large stayed out of the spotlight, though it may not have been entirely by choice. Several articles from a month or two ago suggest he had been marginalized; stuck in a small office with just two staffers and his position reshuffled so that he’d reported to Trump’s top economic adviser Gary Cohn, who is a free-trader, but also now gone. Axios went so far as to assert most in the White House “have little respect for him”. Navarro now appears to have circumvented Cohn, and gained the respect of the one person who counts.

If Navarro is as ascendant as he appears to be, that dramatically increases the chances that NAFTA is dead. The trade deal between the U.S., Canada, and Mexico, which Trump hates, continues only because Trump’s Agriculture Secretary Perdue and Commerce Secretary Ross have been able to talk the President out of a hasty departure. Negotiations continue… But if Navarro’s in the President’s ear, it doesn’t portend a bright future for the pact, since he’s probably even more in favor of killing it than Trump, if that’s possible.

Trump’s Tweets earlier this week wrapping his steel tariffs into NAFTA negotiations would seem to make a successful resolution even more difficult


Except, of course, the President is completely misleading: according to the Trump White House’s own numbers, the U.S. actually runs a trade surplus with Canada. If you separate out services and just look at goods, which maybe is what the President is doing, it then becomes a question of what you consider “large”. Let’s let Navarro define that for us: at a speech we found from last year, he defined a “significant” trade deficit as $15-billion or more. Canada’s less.

Trump’s Tweets also appear to connect the trade deficit with Mexico (which is 5X bigger than Canada) to drugs pouring over the border into the U.S. But illegal drugs are not counted when figuring trade surpluses/deficits. (Maybe they should be, but they’re not).



Trump Moves To Punish Two States That Did Not Vote For Him:


Trump sues California in what shapes up to be a “states rights” battle that’ll probably end up in the Supreme Court. The suit charges California is deliberately obstructing “enforcement of federal immigration law” by refusing to cooperate with federal crackdowns on undocumented immigrants unless they’ve been convicted of crimes.

Transportation Secretary Elaine Chao admitting to Congress that Trump is indeed personally behind efforts to kill a huge tunnel project that would provide desperately needed improvements to public transportation in New York and New Jersey. Here’s her heated exchange at a House Transportation and Infrastructure Committee hearing with New York Democrat Sean Patrick Maloney, which is well worth watching:


Chao went on to say the money is needed by “other states”. In other words, the President would prefer “bridges to nowhere” in states that voted for him, than a desperately needed fix for crumbling infrastructure in states that didn’t.