Woodward Writes Trump Trade Plans Tempered by Cohn and Mnuchin

(Bloomberg) -- President Donald Trump made a sweeping decision in August 2017 that could have rocked the global economy: the U.S. would pull out of Nafta, the World Trade Organization, and its trade deal with South Korea.

Alarmed, Trump’s top staffers scrambled to stop him, according to Bob Woodward’s new book, “Fear.” Bloomberg News obtained a copy of the book ahead of its release, which is scheduled for Tuesday.

Woodward Writes Trump Trade Plans Tempered by Cohn and Mnuchin

Then-top economic adviser Gary Cohn and staff secretary Rob Porter pulled chief of staff John Kelly into the Oval Office to convince Trump to back down. Soon, Secretary of State Rex Tillerson and Defense Secretary James Mattis were brought into the fold and painted a dire picture of the national security and economic consequences of such a move. The president acquiesced -- but only temporarily.

The episode was one of several depicted by Woodward in which Trump’s top advisers managed to thwart the president’s efforts to make sudden, drastic changes to U.S. trade policy by arguing the time wasn’t right, distracting him with other matters, or sometimes sneaking documents off his desk.

Excerpts of the book published earlier in the Washington Post were the first part of last week’s one-two punch of revelations that cast doubt on the loyalty of Trump’s closest advisers. The second blow landed a day later, on Sept. 5, in the form of an op-ed in the New York Times by an unidentified senior administration official who said some of Trump’s closest advisers are working in secret to confound the president’s “more misguided impulses until he is out of office.”

The accounts told a similar story of a White House in chaos, a portrayal Trump has found tough to shake. The revelations promise to continue to dog the president, blunting Republican attempts to go on the offensive ahead of the November midterm elections.

Many of the advisers cited by Woodward have since left the administration, leaving fewer moderating voices in Trump’s inner circle, even as trade tensions with China and Canada, a traditional close ally of the U.S., continue to escalate. Since the start of the year, he’s imposed steep tariffs on steel and aluminum and sparked a tit-for-tat tariff battle with China. He’s in the middle of renegotiating a trade deal with Canada, and trade relations with the European Union are fragile.

‘Do It Today’

Days after aides convinced Trump to back down from his August 2017 threat, the president was back at it. He had in hand a draft letter giving the required 180-day notice to pull out of the South Korean agreement. The letter, according to Woodward, was likely drafted by White House adviser Peter Navarro or Commerce Secretary Wilbur Ross, who frequently clashed with Cohn and Treasury Secretary Steven Mnuchin over trade policy.

Woodward Writes Trump Trade Plans Tempered by Cohn and Mnuchin

According to Woodward’s book, Trump said on Sept. 5, 2017, that he was ready to pull the trigger on quitting the agreement, known as Korus.

“We’re going to withdraw from this,” Woodward quotes Trump as saying. “I just need to wordsmith this and we’re going to get it on official stationery and send this off. We need to do it today.”

Again, several top aides jumped into action. Ultimately, Mnuchin made a breakthrough: he said the move would jeopardize Trump’s efforts to pass massive tax cuts by upsetting free trade Republicans in Congress. Trump agreed to hold off, but only until the tax legislation was passed.

Efforts to avert the U.S.’s withdrawal from major trade accords began soon after Trump’s inauguration, Woodward writes -- indeed, one of Trump’s first acts as president was to pull the U.S. out of the Trans-Pacific Partnership.

About three months into his administration Trump told staff he wanted an executive order withdrawing the U.S. from the North American Free Trade Agreement with Mexico and Canada so he could announce it on his 100th day in office.

Porter contacted then National Security Adviser H.R. McMaster to make the case that the move would create a national security nightmare.

The following day, an emergency meeting of the cabinet secretaries and top advisers was convened. There, Navarro pushed for withdrawal while Kelly, who was then director of Homeland Security, painted a grim picture of the economic and security consequences that would follow.

Still struggling to convince Trump, Porter brought Agriculture Secretary Sonny Perdue into the Oval Office. Perdue laid out for Trump the benefits to farmers from Nafta and showed the president a map of the states that would be hurt the most, emphasizing that those included swing states and others with his biggest base of supporters.

Trump eventually decided he wouldn’t send the 180-day notice, but would ratchet up the rhetoric instead.

‘Wall Street Establishment Idiot’

The book depicts Cohn, who resigned in March, as having regularly locked horns with Navarro, the trade adviser. Navarro, Woodward writes, called Cohn “a Wall Street establishment idiot.” During one meeting with Trump and Navarro about steel tariffs, Cohn lost his cool, telling both men to “shut the f--- up and listen” to his arguments so “you might learn something.”

Cohn, Woodward notes, was frustrated that neither Trump nor Navarro cared much for facts. It was a 180-degree turn from Cohn’s life as president of Goldman Sachs Group Inc., where arguments were won by whoever mustered “more hard, documented information than anyone else in the room.”

At one point, Cohn sent the president a “heavily researched paper” on the service economy, though he knew Trump was unlikely to read it. “Trump hated homework,” Woodward wrote.

On trade and other economic issues, Cohn was aligned with Mnuchin -- also a former Goldman Sachs partner -- and Porter, who controlled Trump’s access to most policy documents. The group was generally at odds with Navarro, Ross and top West Wing aides Stephen Bannon and Stephen Miller. Navarro, Woodward writes, fumed about Cohn and his contingent that tried to stifle Trump’s instincts on trade.

‘Worst Job In America’

In an “eyes only” memo to Trump and then chief of staff Reince Priebus that was obtained by Woodward, Navarro said that Cohn “has amassed a large power base” with aides who are “skilled political operatives fundamentally opposed to the Trump trade agenda.”

Cohn, who a number of people inside and out of the administration are convinced is one of Woodward’s main sources, is portrayed as “astounded” at some of Trump’s lack of understanding of basic economic policy matters, including budget deficits and the debt ceiling. Still, Cohn greatly impressed Trump at a post-election meeting in Trump Tower when he suggested that the Treasury issue 50- and 100-year bonds.

Trump then asked Cohn to join the new administration and offered a series of potential jobs, including deputy secretary of Defense, director of national intelligence, and even secretary of Energy -- because, Woodward writes, Cohn once traded commodities.

The one job Trump said he wouldn’t give Cohn was chairman of the Federal Reserve, because the former investment bank president said that interest rates would need to be raised. Cohn, Woodward writes, was okay with that. He told Trump: “That’s fine. It’s the worst job in America.”

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