U.S. stock index futures slid late Tuesday as White House economic adviser Gary Cohn, a former Goldman Sachs banker, resigned amid a backlash to President Trump’s imposition of double-digit tariffs on steel and aluminum imports.
Cohn, 57, is among the longest-serving members of the Trump administration, and Wall Street had applauded his appointment as director of the National Economic Council in January 2017. Futures contracts linked to the three major indexes, the Dow Jones Industrial average, the S&P 500, and the Nasdaq, all dropped 1 percent or more on reports of his resignation, scheduled to take effect in a few weeks.
“We’ve been bracing for an impact on the stock market if Cohn did, indeed, announce his departure,” Mark Hamrick, senior economic analyst for Bankrate.com, told the Washington Examiner. “It’s a setback for reasonable economic policy, and it’s clear that Cohn was aggravated by the president’s embrace of trade tariffs.”
While Cohn made no mention of the tariffs in a statement released by the White House, he reportedly opposed them, as have a wide swath of corporate executives, Republican lawmakers and U.S. allies overseas.
Major indexes, which initially slid when Trump announced the duties – 25 percent on steel and 10 percent on aluminum – and said he would apply them to every importer, had rallied amid signals that Republicans in Congress would try to curb their impact.
Cohn’s departure combined with Trump’s refusal to back down appears to have shaken that optimism.
“Gary Cohn deserves credit for serving his country in a first-class way,” his former boss, Goldman Sachs CEO Lloyd Blankfein, said in a tweet. “I’m sure I join many others who are disappointed to see him leave.”
Gary Cohn deserves credit for serving his country in a first class way. I’m sure I join many others who are disappointed to see him leave.
— Lloyd Blankfein (@lloydblankfein) March 6, 2018
Cohn was chief operating officer at New York-based Goldman Sachs for seven years before taking the White House post, and he was succeeded by co-COOs Harvey Schwartz and David Solomon.
His decision to leave the Trump administration follows a rocky week that included announcements that communications director Hope Hicks and a deputy, Josh Raffel, were leaving and speculation that national security adviser H.R. McMaster might step down as well.
“It seems as if, at some level, the administration is caught in a downward spiral, and Cohn was seen as a moderating influence, and perhaps even a calming influence when it comes to disruptive policy affecting markets in a negative way,” Hamrick said. “Markets hate uncertainty.”
Trump, however, was undaunted in a press conference, arguing that speculation about a lack of applicants for White House posts is misguided.
“Everybody wants to work in the White House,” he said. “It’s got tremendous energy.” The president conceded he enjoys conflict, however, and, “I like having two people with different points of view argue it out, and then I make the decision.”
