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White House Watch: Free Traders Down, Gary Cohn Out

By Andrew Egger

Another day, another high-profile White House departure. Gary Cohn, President Trump’s chief economic adviser, is leaving the Trump administration—a serious shakeup in a White House where protectionist economics are suddenly on the rise.

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“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. “I am grateful to the president for giving me this opportunity and wish him and the administration great success in the future.”

Cohn was thought to be not long for the White House after he failed last week to convince Trump not to go ahead with plans to implement large new tariffs on steel and aluminum, a protectionist plan at odds with his free-trade principles. His announced departure has shaken others in the free-trade faction of the White House—the faction Trump has taken to calling the “globalists” in recent days—and is an unequivocal boon for White House officials more in line with Trump’s own impulses on trade, such as adviser Peter Navarro and Commerce Secretary Wilbur Ross.

“The number of bad ideas that have come through this White House that were thankfully killed dead—there are too many to count,” an anonymous White House official told Politico. “With Gary gone, I just think, from a policy perspective, it means disaster.”

Cohn’s resignation makes him the latest senior official to leave through the revolving door of the White House, following the departure of communications director Hope Hicks last week.

In a statement to the New York Times, which broke the story, President Trump praised Cohn as “a rare talent” who was instrumental in shaping and passing Republicans’ tax reform package last year.

One More Thing—Congressional Republicans remain none too thrilled about the proposed tariffs, as many of them told my colleague Haley Byrd Tuesday. And a TWS editorial this morning highlights a particularly worrisome facet of the plan: a case-by-case “exemption procedure” for when “we need to have exemptions so that business can move forward,” which has the potential to become a lobbyist bonanza. From the editorial:

The administration has not elaborated on what such an “exemption procedure” might look like. But the general idea seems to be this: Under the new tariff, manufacturing companies that use steel would be able to apply for exemptions to the tariff if they can demonstrate that doing so is crucial to their business. Navarro’s comments implicitly acknowledge that tariffs hurt some businesses and could stall job creation. Otherwise why would manufacturers need to apply for relief from them? In fact, we’ve already seen this kind of market retardation happen in just the last several days: On Saturday, Swedish appliance maker Electrolux announced it was freezing its plans for a $250 million plant expansion in Tennessee. The company said the new tariffs will give foreign manufacturers “a cost advantage that is hard to compete against.” And the tariffs haven’t even gone into effect yet. Leave aside the negative economic effects, though, and consider the political consequence of allowing companies to apply for exemptions to a tariff. Expect a frenzy of lobbying for special favors by corporations eager to prove their critical need for duty-free metals. This sort of rent-seeking has long been commonplace at the state and local level—think of the innumerable tax carve-outs and subsidies granted to specific companies by your local council and state legislature. Granted, the feds have been guilty of this sort of thing, too (remember Solyndra?), but Washington isn’t the capital most corporations look to for special tax favors. Until now.

A surprising headline out of South Korea Tuesday morning: North Korean dictator Kim Jong-Un has reportedly told South Korean officials he is to discuss giving up his state’s nuclear weapons in talks with the United States and to suspend missile tests during diplomatic negotiations.

“The North Korean side clearly stated its willingness to denuclearize,” the South Korean government said in a statement. “It made it clear that it would have no reason to keep nuclear weapons if the military threat to the North was eliminated and its security guaranteed.”

This apparent concession from North Korea is a wild development in Asia’s tense diplomatic theater and a serious foreign policy win for the Trump administration—if the statement is true and the Kim regime made it in good faith. Of course, there are plenty of reasons to be skeptical about those two conditions. But there’s no denying that the Kim regime has in recent weeks opted at least for a new flavor of propaganda: showing flashes of civility rather than continual warlike pronouncements.

President Trump responded to the news with guarded optimism on Twitter Tuesday morning.


Trump Tweet of the Day


Must-Read of the Day—Alice B. Lloyd heads up the new magazine this week with a great feature on the historical significance of the #MeToo movement. She writes:

Our most insightful tourist may have seen it coming. Alexis de Tocqueville celebrated American women’s worldliness as a youthful humor that evolves into a matronly reserve. In Democracy in America, he described the daughters of our young republic and predicted “that the social changes which bring nearer to the same level the father and son, the master and servant, and superiors and inferiors generally speaking, will raise woman and make her more and more the equal of man.” Between cloistered superiority—for America owes its “singular prosperity and growing strength . . . to the superiority of their women”—and free lives lived fully in the world, American women will choose as Americans must. The cruel irony of the American female condition seems to be that despite all they learn of the world as it is, women can never transmit these lessons to their daughters. Everyone has to learn them for herself. It was Leonore Tiefer who showed me this generational barrier when she told me about her mother: a music teacher and opera lover who might have been a composer or a famous critic. But, being a woman, she taught music and history at the local high school all her life—never even promoted to department head.

Here We Go Again—Looks like we’re in for another round of coverage of President Trump’s alleged affair with porn star Stormy Daniels, who is now suing the president in an attempt to void a nondisclosure agreement she signed about their relationship. CNN reports:

The porn star, whose real name is Stephanie Clifford, claims in the lawsuit to have had an affair with Trump several years prior to his presidency. However, the lawsuit claims that when he was running for office and multiple women were coming forward to share stories of their own alleged encounters with the then-Republican presidential candidate, Cohen intervened in an attempt to keep Clifford from coming forward as well. “Despite Mr. Trump’s failure to sign the Hush Agreement, Mr. Cohen proceeded to cause $130,000.00 to be wired to the trust account of Ms. Clifford’s attorney. He did so even though there was no legal agreement and thus no written nondisclosure agreement whereby Ms. Clifford was restricted from disclosing the truth about Mr. Trump,” the document states.

Song of the Day—“The Ledge,” Fleetwood Mac


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