The resignation of Gary Cohn is a significant blow to Donald Trump’s presidency, and recovering from it will be a significant challenge.
Departures are normal after a president’s second year, but the circumstances of Cohn’s leave-taking as top economic adviser are anything but normal after only 14 months.
Cohn was in the middle of a major policy dispute inside the Trump administration over trade policy. On one side were Cohn and free-trade advocates, and on the other was the administration’s protectionist wing led by Commerce Secretary Wilbur Ross, trade negotiator Robert Lighthizer and President Trump’s personal trade swami, Peter Navarro.
Losing policy disputes comes with the job, but the particulars of this loss revealed more about Trump’s increasingly self-damaging style of managing his senior officials.
Last week, the president announced his intention to impose tariffs on imported steel and aluminum, though “announcement” overstates what happened. Trump essentially blurted out the news at a White House meeting, blind-siding Cohn and the rest of the administration team, in what amounted to a coup d’état by Ross and the protectionists.
Predictably the news caused a firestorm in financial markets and among countries who are not merely U.S. trading partners but its needed allies on international security issues, such as enforcing sanctions against North Korea.
Cohn leaves behind a strong legacy. He pushed hard for deregulatory initiatives that have produced strong growth. With Council of Economic Advisers Chair Kevin Hassett, he ran point for the White House on the big tax-cut bill. As important, Cohn assembled a first-rate team of policy advisers, not just on taxes but also on health care and infrastructure.
So an obvious question: Who will replace him? Put differently, who in the community of free-market economic specialists would take the job now? Cohn, a strong personality in his own right, provided ballast against some of Trump’s worst economic-policy instincts. It is difficult to imagine that anyone outside the president’s current protectionist cheer-leading squad would volunteer to put up with more of what happened during the past week.
Trump’s early appointments to key Cabinet positions and to the White House policy-making apparatus were often stellar. Now, surely, the mill of rumors will begin grinding about more departures of top people, such as National Security Adviser H.R. McMaster.
A successful president needs allies, and Trump has had them so far. By contrast, the tariff decision is a leadership fiasco that has cost Trump a key ally in Gary Cohn. It is a loss, and this presidency cannot afford more like it.