(Bloomberg) -- Gary Cohn is resigning as President Donald Trump’s top economic adviser, leaving his post as the administration prepares to impose steep tariffs on steel and aluminum that Cohn has opposed.
Cohn didn’t mention the dispute in a statement distributed by the White House, saying only that “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.”
But the economic adviser quit just hours after a confrontation with the president in the Oval Office, according to two people familiar with the episode. Trump asked for an assurance Cohn would publicly stand behind the tariff plan. Cohn didn’t answer, the people said.
The dollar slid, stocks tumbled and Treasuries climbed on the resignation news. The greenback fell 0.5 percent against the yen -- often a haven in turmoil -- to 105.63 as of 9:01 a.m. in Tokyo trading. S&P 500 Index futures dropped 1.1 percent, and equities retreated from Tokyo to Sydney. Ten-year Treasury yields fell more than 4 basis points, to 2.84 percent.
The president’s announcement on Thursday that he would press forward with a 25 percent tariff on steel imports and 10 percent on aluminum left markets reeling and served as a public rebuke of Cohn, the director of the National Economic Council, who had furiously lobbied against the penalties.
One person with knowledge of the chaotic West Wing decision-making process said Cohn and Commerce Secretary Wilbur Ross, who had recommended the tariffs to the president, privately argued over the issue just hours before it was announced.
The tariffs appeared to mark a tipping point for Cohn, 57, a registered Democrat who made clear that he saw his job in the administration to be an advocate for business-friendly economic principles. He helped Trump steer tax cuts into law last year but proved unpersuasive on trade, where Cohn was a stark counterpoint to nationalists and economic populists in the administration.
His departure may cause further turbulence in financial markets, where investors saw him as a steady hand in an otherwise unpredictable administration. His resignation also leaves uncertainty about the president’s economic agenda.
Trump expressed gratitude for Cohn’s service in a statement.
“Gary has been my chief economic adviser and did a superb job in driving our agenda, helping to deliver historic tax cuts and reforms and unleashing the American economy once again,” Trump said. “He is a rare talent, and I thank him for his dedicated service to the American people.”
White House officials said Cohn’s departure date hasn’t been set but will be in a few weeks. One senior White House official said Cohn offered to assist the transition to a successor.
Shortly before Cohn’s resignation was announced, Trump said at a news conference he wouldn’t have trouble replacing any of his top advisers if they departed.
“I could take any position in the White House and I’ll have a choice of the 10 top people having to do with that position,” Trump said. “Everybody wants to be there. And they love this White House because we have energy like rarely before.”
On Twitter later, the president said he would decide soon on a replacement for Cohn, adding "many people wanting the job -- will choose wisely!"
National Security Adviser H.R. McMaster was solidly aligned with Cohn in fighting the tariff, and some inside the White House believe McMaster endangered his standing with Trump by being too strident, said a person familiar with deliberations. .
Trump met Tuesday in the Oval Office with former U.S. Ambassador to the UN John Bolton, a potential successor to McMaster, though it wasn’t clear what the two discussed, according to a person familiar with the matter.
Cohn mounted a last-ditch effort to persuade Trump to halt or blunt the tariffs. He had planned to bring in executives from U.S. companies that depend on the metals to meet this week with Trump to make the case that the tariffs will cost more jobs than they save and damage the U.S. economy, according to two people familiar with the plan. The meeting was canceled Tuesday, according to another person.
Trump pulled out of the meeting with the executives but offered them a session instead with Vice President Mike Pence, said a person familiar with the executives’ communications. The executives declined the offer. After Cohn resigned, the executives changed their mind and accepted the meeting with Pence, the person said.
Trump reiterated his determination to proceed with the tariffs at the Tuesday press conference, brushing aside threats of retaliation from the European Union.
“When we’re behind every single country, trade wars aren’t so bad,” Trump said Tuesday in a press conference at the White House with Swedish Prime Minister Stefan Lofven. “The trade war hurts them, not us.”
Cohn appeared on the verge of leaving the White House as early as last August, in the aftermath of violent clashes in Charlottesville, Virginia, between white supremacists and counter-protesters. Trump’s contention that there were “very fine people on both sides” of the conflict, in which one counter-protester was killed, drew widespread condemnation -- including from Cohn, who is Jewish.
“I believe this administration can and must do better in consistently and unequivocally condemning these groups and do everything we can to heal the deep divisions that exist in our communities,” Cohn told the Financial Times.
At the time, Cohn said he was reluctant to leave his position “because I feel a duty to fulfill my commitment to work on behalf of the American people.” He said later that he decided to stay in the administration in part to help win passage of the tax law Trump signed in December.
“The amount of impact that we can have on the U.S. economy and U.S. citizens and changing the forward outlook of the United States -- this is a once-in-a-lifetime opportunity, and I would never miss this,” he said.
Cohn grew up in the Cleveland suburb of Shaker Heights, grandson of a Polish immigrant, son of an electrician who became a real estate developer. On a day off from an early job selling window frames and aluminum siding, Cohn shared a ride to the airport with a trader, according to a commencement address he gave in 2009 at his alma mater, American University in Washington. The man said he needed someone to help trade options, and Cohn talked his way into the job.
At Blankfein’s Side
He became an independent silver trader on Comex in 1983, and seven years later was hired by the Goldman Sachs Group Inc. commodities unit J. Aron. Not long after, Lloyd Blankfein took over the division; Cohn became Blankfein’s deputy in 1996. They spent two decades at each other’s side.
When Blankfein was promoted to chairman and chief executive officer in 2006, Cohn went with him as president and chief operating officer. They were the only two executives on the Goldman Sachs board.
Throughout those years, Cohn was regarded both inside the firm and outside as a man who pushed hard.
“If there is one thing out of this on how to stand out, it’s take risks,” Cohn said in the commencement address. “Everything I’ve done in my career, and everything that most of you have done to this point, is to take risks.”
Cohn’s aggressiveness helped keep Goldman Sachs on top of the Wall Street pecking order, where it became the most profitable securities firm in history. For his work in 2007, he was rewarded with a $67.5 million pay package. The next year, the U.S. economy nearly collapsed, and Congress fixed part of the blame on Goldman Sachs.
Cohn was seen by some as too abrasive to lead Goldman Sachs despite his efforts to soften his style. When Blankfein announced in September 2015 that he had cancer, Cohn took over some of the CEO’s client and traveling duties. But it was clear by the summer of 2016 that Blankfein wasn’t going to step down, and by the end of the year it was Cohn who was out.
Trump treated Goldman Sachs as a punching bag on the campaign trail, but he relied on people with connections to the bank after he won the White House. During the transition, Cohn visited Trump Tower, stepping into the role of what some have described as Trump’s personal investment banker. He helped vet potential financial regulator picks, including the Commodity Futures Trading Commission’s Christopher Giancarlo and Fed Vice Chairman Randal Quarles.
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